Millions of Taxpayers May Be Owed Refunds and the Clock Is Ticking
A recent Tax Court decision could mean big refunds for taxpayers who were hit with penalties and interest during the COVID-19 pandemic. But here’s the catch: most people need to file a claim by July 10, 2026, or they could lose out entirely.
The case, Kwong v. United States, interpreted a disaster-relief provision in the tax code that postpones filing and payment deadlines during a federally declared disaster. Because the COVID-19 disaster declaration ran from January 20, 2020, through May 11, 2023—plus 60 additional days—the court found that returns and payments due during that window weren’t actually late until after July 10, 2023.
The implication? The IRS shouldn’t have assessed late-filing penalties, late-payment penalties, or certain interest charges during that entire 3.5-year stretch. If you paid those amounts, you may be entitled to a refund. If they’re still on your account, you may be entitled to an abatement.
The government disagrees and is expected to appeal. That means this could take years to fully resolve. But taxpayers can’t afford to wait—statute of limitations rules require most claims to be filed by July 10, 2026.
If you were assessed penalties or interest between 2020 and mid-2023, this may apply to you. Don’t let the deadline pass without protecting your rights. Contact FACTS CPA today to find out if you’re eligible before time runs out.