If you were penalized for late tax returns during the “COVID era,” you may be entitled to a refund. A federal tax advocate warns that the deadline to claim the refund is approaching as a potential court battle looms.
The national taxpayer advocate, an independent official within the government, said that July 10 is the deadline to file for a potential tax refund from the IRS.
That stems from the court ruling Kwong v. United States, which said that in a federally declared disaster, tax deadlines should be postponed for the disaster period plus 60 days. The specific ruling comes from Section 7508A(d), and the court said the COVID disaster period stemmed from Jan. 20, 2020, through May 11, 2023, plus 60 days. July 10, 2023, is the new deadline for tax year 2019, 2020, 2021 and 2022 filings.
A flag waves outside the International Revenue Service Building in Washington, D.C., Feb. 18, 2025.
A claim for a tax refund usually must be filed within three years from the date a return was filed, hence the July 10 potential deadline.
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The advocate warns that the IRS disagrees with the ruling and the Department of Justice will likely appeal. However, if a taxpayer was penalized during the period, a refund request could still be filed.
According to the advocate, a taxpayer may be entitled to a refund or abatement for the following:
- Penalties assessed for failure to timely file returns, failure to pay taxes, or failure to make estimated tax payments.
- Interest that began accruing earlier than it should have, or not at all.
- Overpayment interest for the 2020-2023 disaster period.
The advocate estimated that tens of millions of taxpayers may have been affected. If the court decision holds, “penalties or interest paid and to abatements of penalties or interest not yet paid” on taxes could be refunded.
“It may also affect taxpayers who filed late international information returns, which can result in significant penalties even when no tax is due,” the advocate said in a newsletter.
Refund claims should be filed using Form 843. The advocate also recommends filing protective claims because the file is still being litigated. The form cannot be submitted electronically, and the advocate warns that this could complicate the IRS tracking. The advocate advises the IRS to allow an electronic option for refunds.
The advocate recommends speaking with a tax professional and looking an at IRS tax transcript to see if you qualify or were penalized.
