Tens Of Millions Of Taxpayers May Be Owed COVID-Era Refunds From The IRS

Millions of U.S. taxpayers could be eligible for IRS refunds or reductions in penalties and interest assessed during the COVID-19 federal disaster period, according to a notice from the National Taxpayer Advocate. The potential relief stems from a November 2025 court decision in Kwong v. United States, which found that federal tax deadlines were automatically postponed from January 20, 2020, through July 10, 2023—the duration of the COVID-19 emergency declaration plus 60 days.

The ruling interprets Internal Revenue Code Section 7508A(d) as mandating that tax filing and payment deadlines falling within this window were not actually late until after July 10, 2023. As a result, the IRS should not have levied late-filing or late-payment penalties, nor charged interest during that period, the court said. However, the IRS disagrees with this interpretation and is appealing the decision, meaning the issue could take years to resolve. In the meantime, the IRS is not issuing refunds automatically, and affected taxpayers must act to preserve their rights.

The National Taxpayer Advocate’s office has warned that this relief is not automatic. Taxpayers who want to claim a refund or abatement for penalties and interest paid on federal tax obligations due between January 20, 2020, and July 10, 2023, must file IRS Form 843 by July 10, 2026. The form cannot be submitted electronically and must be mailed on paper—preferably by certified mail to provide proof of timely submission.

The recent court decision in Kwong v. United States could affect tens of millions of Americans, including those living abroad. Taxpayers should request IRS account transcripts for tax years 2019–2022 to identify which penalties and interest may be refundable. The National Taxpayer Advocate, Erin Collins, emphasized in a public alert that the relief will not occur automatically and that missing the July 10, 2026, deadline will forfeit the right to a refund—even if the IRS ultimately loses its appeal.

As explained by Greenback Tax Services, each tax year requires a separate Form 843. For those who believe they may be entitled to a refund, the form should be marked “Protective Refund Claim Pursuant to Kwong v. United States” to lock in the filing date and preserve rights while the appeal is pending.

The IRS has not begun issuing refunds. If the agency’s appeal is unsuccessful, those who filed timely claims may eventually receive refunds for penalties and interest. Until then, taxpayers must ensure their claims are submitted by the July 10, 2026, deadline to remain eligible for relief.