A federal court ruling just revived a hidden tax break that could put thousands of dollars back in your pocket, but only if you act before a July deadline most Americans don’t know exists.
Quick Take
- Tens of millions of taxpayers may qualify for refunds or penalty abatements from the COVID-19 pandemic period spanning January 2020 through May 2023
- The Kwong court case confirmed that federal disaster declarations automatically extended tax filing deadlines, entitling affected taxpayers to relief from assessed penalties and interest
- Eligible taxpayers must file IRS Form 843 claims by July 10, 2026, using paper submission and certified mail to document timely filing
- The National Taxpayer Advocate warns the IRS has not publicized this opportunity widely, leaving millions unaware of the deadline
The Hidden Refund Window Nobody’s Talking About
When the pandemic shuttered businesses and sent millions home in early 2020, the IRS extended tax deadlines nationwide under disaster relief provisions.
But here’s what most people missed: many taxpayers still got slapped with late-payment penalties and interest charges despite those extensions.
Now, a court ruling validates what should have happened all along—automatic relief for those penalties. The National Taxpayer Advocate estimates tens of millions qualify, but the clock is ticking.
Tens of millions of American taxpayers may be entitled to refunds or reduced penalties and interest due to delayed filing deadlines during the COVID-19 emergency declaration. https://t.co/W6tnwKRwqK
— FOX6 News (@fox6now) May 2, 2026
How the Kwong Case Changed Everything
A federal court decision in the Kwong case confirmed that the tax code’s handling of federal disaster declarations meant filing and payment deadlines were automatically postponed throughout the entire COVID period. This wasn’t a discretionary IRS decision; it was law.
Yet many taxpayers still faced penalties anyway. The ruling essentially says the IRS got it wrong and owes refunds or penalty abatements to those charged during this window.
The Justice Department may appeal, but the National Taxpayer Advocate is urging affected taxpayers to file claims now rather than wait.
Who Qualifies and What You Can Recover
Eligible taxpayers may reclaim penalties assessed for failure to file timely returns, failure to pay taxes, or failure to make estimated tax payments.
You can also recover interest that accrued earlier than it should have, or interest on overpayments during the 2020-2023 disaster period. Small business owners, self-employed individuals, and anyone who missed a deadline between January 20, 2020, and May 11, 2023, should review their tax records.
The amounts can be substantial—for struggling households and businesses still recovering from pandemic losses, these refunds represent real money.
The Paper-Filing Nightmare
Here’s the frustrating part: you cannot file this claim online. The IRS requires Form 843 submissions to be made on paper only, with no immediate confirmation of receipt.
The National Taxpayer Advocate strongly recommends sending your claim by certified mail to create evidence of timely submission in case forms get lost in the bureaucratic shuffle. This outdated process creates a barrier precisely when millions need relief most.
Tax professionals argue the IRS should modernize its system, but until then, certified mail is your insurance policy.
Why the IRS Isn’t Shouting About This
The National Taxpayer Advocate has criticized the IRS for failing to adequately publicize this relief opportunity. The advocate urged the agency to extend filing deadlines, create electronic submission options, and provide systemic relief automatically rather than forcing millions to navigate paper forms.
Without widespread awareness, countless eligible taxpayers will miss the July 10, 2026, deadline simply because they never heard about it. This creates an equity problem: those with access to tax professionals or the media will file; those without may lose thousands.
Tens of millions of taxpayers may be owed IRS refunds from COVID-erahttps://t.co/yYIC1KSVbp
— Sabrina (@SabrinaNC10) May 3, 2026
Act Now, Even If You’re Uncertain
Tax experts recommend filing Form 843 by July, even if you’re unsure whether you qualify or if the ongoing legal appeals might change outcomes. Filing now protects your position and preserves your claim.
If the Kwong ruling holds up, you’re positioned for relief. If the IRS wins the appeal, you’ve lost nothing by trying. The downside of inaction—missing a deadline with no second chances—far outweighs the minimal cost of filing a paper form via certified mail.
Sources:
Millions may qualify for significant IRS refunds from COVID-era but deadline looms, advocate warns
IRS Coronavirus Tax Relief and Economic Impact Payments
