A federal tax oversight office says taxpayers may qualify for refunds tied to COVID-era penalties but must act before a July cutoff.
By yourNEWS Media Newsroom
A federal watchdog within the Internal Revenue Service is warning that tens of millions of Americans may be eligible for tax refunds or reductions in penalties and interest tied to the COVID-19 disaster period, but most must submit claims before July 10, 2026.
The notice, issued by the National Taxpayer Advocate on April 30 and updated May 1, states that many taxpayers were charged penalties or interest during a period when filing and payment deadlines may have been legally postponed under federal disaster provisions.
According to the guidance, multiple court rulings—including a decision issued in November—determined that tax deadlines should have been automatically delayed throughout the duration of a declared federal disaster, plus an additional 60 days. The COVID-19 disaster designation remained in place from Jan. 20, 2020, through May 11, 2023, with the added extension pushing the relevant tax window through July 10, 2023.
Based on that interpretation, the watchdog said tax returns and payments due within that timeframe should not have been considered late until after July 10, 2023. As a result, penalties for late filing or payment, as well as certain interest charges, may have been improperly assessed.
“The bottom line: You may be entitled to a refund or reduction of assessed penalties and interest,” the office stated, noting that such relief could be significant for taxpayers experiencing financial strain.
The agency indicated that eligible taxpayers could seek refunds or abatements for a range of charges, including penalties related to late filings, missed estimated tax payments, and accrued interest that may have been calculated prematurely or unnecessarily during the disaster period.
Officials emphasized that the issue is not limited to a narrow group. “This issue is widespread and not limited to a small or specialized group of taxpayers,” the notice stated, adding that tens of millions may have been affected.
However, the IRS is not expected to issue these refunds automatically in most cases. Taxpayers will generally need to file a formal claim to request relief. The filing deadline is tied to standard limitations, typically requiring submission within three years of filing a return or two years from the date of payment.
For many individuals, that timeline results in a deadline of July 10, 2026.
To request a refund or abatement, taxpayers must complete Form 843, known as “Claim for Refund and Request for Abatement.” The form must be submitted in paper format, as electronic filing is not available for this process.
The National Taxpayer Advocate also suggested that some individuals may consider submitting protective claims to preserve their rights while ongoing litigation continues to shape the interpretation of the law.
The office recommended that taxpayers consult with qualified tax professionals for assistance and urged lawmakers and advisors to raise awareness about the approaching deadline.
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