If you paid IRS penalties or interest during the COVID years, do not leave that notice in the “handled” pile. Before July 10, it deserves one more look.
The National Taxpayer Advocate says tens of millions of taxpayers may be entitled to refunds or abatements of certain COVID-period penalties and interest. The same guidance is clear on the part that matters now: relief is not automatic, and most taxpayers must file by July 10, 2026, to protect their rights.
Why July 10 Matters
The date comes from a court decision called Kwong v. United States. Under the reasoning in that case, certain filing and payment deadlines that fell during the COVID-19 federal disaster period may have been postponed. That period ran from January 20, 2020, through May 11, 2023, plus 60 days. In practical terms, many affected returns and payments would not have been late until after July 10, 2023.
For many taxpayers, the refund claim deadline is three years from that July 10, 2023 date, which brings us to July 10, 2026. If penalties or interest were paid later, the two-year rule may give a taxpayer more time. That detail is exactly why the records matter.
The legal issue may take time. The filing deadline still has to be handled now.
Who Should Check
Start with your records if you filed late, paid late, or had IRS penalties or interest assessed between January 20, 2020, and July 10, 2023. Do not stop at the personal return. For family-business owners, this could involve an entity return, payroll tax filing, estimated tax payment, estate matter, gift tax issue, excise tax item, or international information return.
The useful question is not, “Do I qualify?” The useful first question is, “Did the IRS charge me for being late during a period that may not have been late?”
Pull the Transcript
The first document to review is your IRS tax account transcript. Look for penalty entries, interest charges, assessment dates, payment dates, credits, adjustments, and refunds.
Do not rely only on an old IRS notice. A notice may show what was charged. The transcript helps show when the IRS assessed it, when it was paid, and what tax period is involved. Taxpayers can generally access transcripts through an IRS online account or request them by mail. Mailed transcripts generally arrive in five to ten calendar days.
Know What You Are Asking For
If you already paid the penalty or interest, you may be looking at a refund claim. If the IRS assessed the amount but you have not paid it, you may be looking at an abatement request.
A protective claim may be appropriate when the legal issue or final amount is still unsettled. For this COVID-period issue, that matters because the broader Kwong question may continue through the courts. Waiting for a final answer could mean missing the deadline to preserve the claim.
For penalty and interest claims tied to this issue, taxpayers generally use Form 843, Claim for Refund and Request for Abatement, unless they are changing the underlying tax return itself. The IRS describes Form 843 as the form used to claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax.
File It So It Can Survive Review
A protective claim should be specific. The Taxpayer Advocate says taxpayers generally should write language such as “Protective Refund Claim Pursuant to Kwong Case” and identify the taxpayer, contact information, affected years, legal issue, basis for the claim, and specific penalties or interest involved.
A vague note saying you reserve the right to ask for a refund later is usually not enough. In most cases, taxpayers should file a separate Form 843 for each tax period and each type of tax. Keep a full copy of anything you send, and use a mailing method that proves when the claim was sent and received.
Watch the Promises
Be careful with anyone promising a guaranteed refund. The Taxpayer Advocate warns taxpayers to avoid promoters who charge excessive fees, pressure taxpayers to act, or cannot explain the legal basis for the claim.
Legitimate tax relief starts with records, dates, and the law. Not pressure.
Before July 10
If you paid IRS penalties or interest during the COVID years, now is the time to check the file. We can help you review your transcripts, identify whether your penalties or interest fall into the affected period, and determine whether a refund claim, abatement request, or protective claim should be considered before July 10.