IRS Refund Potential: Millions Could Be Owed From COVID-Era Penalties
Tax attorneys are advising millions of Americans to review their tax records for a potential refund stemming from penalties and interest charged during the COVID-19 pandemic. A recent court ruling could unlock significant financial relief for those impacted by tax deadlines extended due to the public health emergency.
The Court Ruling and Extended Deadlines
From January 20, 2020, to May 11, 2023, the U.S. Government operated under a federally declared public health emergency. In November, a federal court determined that this period qualified for tax deadline extensions under Section 7508A(d) of the tax code. This effectively pushed the deadline for filings from 2019, 2020, 2021, and 2022 to July 10, 2023.
Tax lawyers argue that because of this extension, the IRS may not have been justified in levying penalties and interest during that window. If you were charged such fees, you may be eligible for a refund.
Who Qualifies for a Refund?
Any individual or business that incurred penalties or interest between January 20, 2020, and July 10, 2023, could be eligible. The potential refunds could be substantial, particularly for businesses that faced financial difficulties during the pandemic and accrued significant failure-to-pay penalties.
How to Claim Your Refund
To initiate a claim, you’ll need to gather your tax records and determine if penalties or interest were assessed during the qualifying period. Here’s how:
- Obtain Your Tax Transcript: You can access your tax account transcript online through the IRS website or request it by mail. The IRS automated phone service at 800-908-9946 can also provide a transcript.
- File IRS Form 843: Submit IRS Form 843, “Claim for Refund and Request for Abatement.”
- Reference the Court Ruling: Clearly state that your claim is a “protective claim” based on the Kwong v. United States decision and Section 7508A(d) related to the COVID-19 disaster period.
The Deadline: July 10, 2026
There is a firm deadline to file your claim: July 10, 2026. Taxpayers generally have three years from when the return was filed to file for a refund or two years from when taxes were paid. Missing this deadline could mean forfeiting your potential refund.
FAQ
Q: What if the IRS appeals the ruling?
A: Even if the IRS appeals, you should still file a claim before the July 10, 2026, deadline to protect your rights.
Q: Where can I identify IRS Form 843?
A: You can download IRS Form 843 from the IRS website: https://www.irs.gov/pub/irs-pdf/f843.pdf.
Q: What if I’m unsure how to file a claim?
A: Consider consulting with a qualified tax professional for assistance.
Don’t miss out on potential funds. Take the time to review your tax records and file a claim if you believe you were wrongly assessed penalties or interest during the pandemic period.
