Millions May Be Owed Tax Refunds but Must File First

A recent court decision has created a potential path to tax refunds tied to the pandemic years, but the opportunity is not automatic and may close quickly for many taxpayers.

The issue stems from a federal case, Kwong v. United States, which interpreted a tax code provision governing disaster relief. The court found that filing and payment deadlines were effectively postponed for the entire COVID federal disaster period, plus 60 days. That runs from January 20, 2020, through July 10, 2023.

If that interpretation ultimately holds, penalties and interest assessed for late filing or late payment during that window may not have been valid.

The IRS did assess those charges during the period. As a result, a large number of taxpayers may have paid penalties or interest they would not have owed under the court's reading of the law.

The group is broad. It includes individuals, small businesses, corporations, estates, and trusts. It also extends beyond income taxes to areas like estimated payments and certain information return penalties.

A simple way to gauge potential eligibility is to look back at tax years affected by the pandemic. If penalties or interest were charged for late filing or late payment between early 2020 and mid-2023, there may be a basis to review those amounts.

But the relief is not automatic. In most cases, taxpayers must file a claim to request a refund or to reduce amounts that are still unpaid. For many, the deadline to act is July 10, 2026, based on standard time limits that generally allow three years from filing or two years from payment.

Taxpayers can visit www.CovidTaxRefunds.com to check their eligibility and learn more about potential refund opportunities before the July 10, 2026, deadline.

The process itself is not streamlined. Taxpayers typically need to file Form 843, which must be mailed on paper. There is no electronic filing option, and the source advises sending claims by certified mail to document timely submission.

Because the legal issue is not settled, some taxpayers are filing what are known as protective claims. These claims do not require a precise refund amount. Instead, they preserve the taxpayer's right to a refund while the courts continue to decide the issue.

That uncertainty is important. The government disagrees with the court's interpretation and is expected to challenge it. A final resolution could take years.

In the meantime, outcomes may depend on awareness. Taxpayers who know about the issue and file in time may benefit if the ruling stands. Those who do not may lose the opportunity, even if they would have qualified.

For now, the takeaway is practical. There is a credible path to refunds tied to pandemic-era penalties and interest. Whether that leads to money back will depend on future court decisions and whether taxpayers take steps to preserve their rights before the filing window closes.