If you paid a tax penalty between January 2020 and July 10, 2023, there is a federal court ruling that says the IRS may have charged you incorrectly. The government is fighting that ruling in court. And by July 10, 2026, your window to get in line for a potential refund closes permanently.
July 10, 2026 is the deadline. After that date, it does not matter how the litigation turns out. If you have not filed a claim, you will not be eligible for a refund.
The IRS is not sending reminders. Most of the people pushing awareness on this are tax attorneys and the National Taxpayer Advocate, whose job is to act as a watchdog inside the IRS system.
What the Kwong ruling means for your Covid-era tax penalties
In November 2025, the U.S. Court of Federal Claims ruled in Kwong v. United States that a section of the tax code, IRC Section 7508A(d), required the IRS to automatically suspend filing and payment deadlines for the entire Covid federal disaster window, which ran from January 20, 2020, through July 10, 2023.
If the court is right, the IRS should not have assessed late-filing penalties, late-payment penalties, or related interest on returns and payments due during that stretch. Tens of millions of taxpayers paid those charges anyway. The court says that money may have been improperly collected.
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The Department of Justice has appealed. Nothing is settled. Refund claim deadlines remain, however. Most affected taxpayers have three years from when they filed their return, or two years from when they paid, whichever comes later.
Since Kwong pushes that calculation to July 10, 2023, most filers are looking at July 10, 2026, as their last shot.
“Filing a claim does not guarantee relief,” National Taxpayer Advocate Erin Collins wrote on July 5. “But missing the deadline may permanently prevent taxpayers from receiving a refund to which they may ultimately be entitled.”
Who qualifies for a Covid tax penalty refund before July 10?
In addition to individuals, businesses, trusts, estates, and nonprofits that paid federal failure-to-file penalties, failure-to-pay penalties, estimated tax penalties, or related interest on returns due between Jan. 20, 2020, and July 10, 2023, may have a claim. For most individual filers, that means tax years 2019 through 2022.
Already paid? You are asking for a refund. The IRS assessed it but you have not paid? That is called an abatement, a request to cancel the charge. Either way, July 10 is your date.
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During fiscal year 2023 alone, the IRS assessed more than 14.2 million individual estimated tax penalties and roughly 18.6 million failure-to-pay penalties, according to IRS data. Not every one falls inside the Kwong window, and qualifying does not guarantee money back.
Collins has called this one of the most significant refund opportunities in recent tax history, and that is not hard to believe, looking at those numbers.
The IRS has not been advertising any of this. The agency stands to pay out potentially billions of dollars if the Kwong ruling survives appeal. USA Today reported that many eligible taxpayers have no idea the window exists. “Time is critical for people considering filing a claim,” said Glen Frost, founding partner at Frost Law.
How the IRS just made it easier to file your Covid refund claim
On July 1, the IRS launched an electronic filing option for Form 843, the Claim for Refund and Request for Abatement, but only for Kwong-related Covid claims. Individual taxpayers with an existing IRS Online Account can find the tool on the agency’s mobile-friendly forms page. It only covers penalties and interest that have already been paid in full.
Business taxpayers and individuals who prefer paper can mail Form 843 to the IRS service center at 1973 N. Rulon White Blvd., Ogden, UT 84201. Tax advisors recommend sending paper filings certified mail with a return receipt to document the submission date.
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How to fill out Form 843 for a Covid penalty refund claim
Make sure you are working from the December 2024 revision of Form 843. The IRS redesigned the form in late 2024, and the line numbers and checkboxes differ from older versions still circulating online.
For paper filers, write “Kwong v. United States” across the top. The IRS routes the claim based on that notation. On Line 8, state that the filing is a protective claim under Treasury Regulation Section 301.6402-2(b)(1). Fill in the tax year, the type of penalty or interest, and the amount paid. If a claim covers more than one tax year, file a separate Form 843 for each year.
If you do not know the exact penalty amounts, pull your IRS account transcripts for 2019 through 2022. Those transcripts show every penalty and interest charge on your account. You can get them through your IRS Online Account or request them by mail. With those numbers, you can file either a complete claim or a protective one that locks in your rights without requiring exact figures yet.
Collins pointed to one group most coverage has ignored. Some people who never filed original returns for 2019 through 2022, or who could file amended returns to claim missed credits, may also fall inside the July 10 window under the same disaster-period reasoning. It’s worth checking with a tax professional if that sounds like your situation.
What happens after you file your Covid tax refund claim with the IRS?
Do not expect a check anytime soon. The IRS is appealing Kwong, and claims will sit in suspense while the case moves through the Federal Circuit, which could take years. Filing now means you are in the queue when that eventually resolves. People who waited past July 10 will not be, regardless of how the courts land.
Filing Form 843 directly with the IRS costs nothing. Pulling your transcripts and filling out the paperwork takes most people a couple of hours.
Collins has also warned about third-party services promising guaranteed refunds. Nobody can promise that. The law is still being litigated.
Filing through IRS.gov directly costs nothing, while paying someone else to do it — based on guarantees they cannot make — adds unnecessary risk and cost.
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