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Court Ruling Opens Path to IRS Pandemic Penalty Refunds Before July 10, 2026

Refunds require a protective claim to be filed to preserve rights during ongoing appeals.

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FILE - A sign is displayed outside the Internal Revenue Service building May 4, 2021, in Washington. (AP Photo/Patrick Semansky, File)
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Overview

  • Kwong v. United States interpreted Section 7508A(d) to postpone many federal tax deadlines through July 10, 2023 for the COVID disaster period.
  • Individuals and businesses charged IRS penalties or interest between January 20, 2020 and July 10, 2023 may be eligible to seek refunds or abatements.
  • Eligible taxpayers should review IRS account transcripts for penalty or interest assessments during the window, obtainable online, by mail, or via 800-908-9946.
  • Claims should be submitted on IRS Form 843 as a protective claim referencing Section 7508A(d) and the Kwong decision, with a widely cited deadline of July 10, 2026.
  • The IRS is expected to challenge the ruling and outcomes remain uncertain, as shown by refund lawsuits such as Western Digital’s, and relief generally excludes items like underpayment penalties and early‑distribution penalties.