IRS Penalty Refund Deadline Is July 10
Millions of taxpayers could be entitled to refunds for IRS penalties and interest paid during the COVID-19 emergency period, but time is running out. Taxpayers who were assessed certain penalties between January 20, 2020, and July 10, 2023, may be eligible to file a claim. But the deadline is today, July 10, 2026.
The potential refunds stem from the U.S. Court of Federal Claims decision in Kwong v. United States (179 Fed. Cl. 382, Nov. 2025). The court ruled that under the tax law in effect during the COVID-19 federal disaster period, many tax filing and payment deadlines should have been automatically postponed. If that decision ultimately stands, some penalties and related interest assessed during that period may have been improper.
However, the IRS will not issue refunds automatically. Instead, affected taxpayers generally need to file a refund claim before the statute of limitations expires.
Who May Be Eligible?
- You filed a tax return during the disaster relief period and were assessed penalties or interest.
- You paid or still owe penalties or interest for filing or paying late during the COVID disaster period.
- You filed international information returns late.
- You believe you missed claiming a refund, refundable credit, withholding credit, estimated tax payment credit or another tax benefit during the COVID disaster period.
How to File a Claim
Most taxpayers can protect their rights by filing IRS Form 843 (Claim for Refund and Request for Abatement) before July 10, 2026. Since the federal government has appealed the Kwong decision, it could take months or even years before the litigation is resolved. Filing now preserves your right to a refund if the courts ultimately uphold the ruling.
You can review your IRS account transcripts to determine whether you were charged eligible penalties before deciding whether to submit a claim.
