You don’t want to miss this!
The IRS has just made a major announcement that may add some cash to your pocket—but you must act by July 10, 2026!
According to the National Taxpayer Advocate (NTA), “Potential refunds or abatement of penalties stems from a court ruling in Kwong vs. United States interpreting a tax rule that says once a federally declared disaster is in effect, tax code Section 7508A(d) mandates postponement of applicable tax deadlines for the disaster period plus 60 days. The court ruled the COVID-19 public health emergency from Jan. 20, 2020, through May 11, 2023, fell under this provision. Add in 60 days, and the new tax deadline for tax year 2019, 2020, 2021 and 2022 filings would have been July 10, 2023.
“Without taxes due, the IRS likely also had no right to levy penalties and interests during that window, tax lawyers said. So, if you were charged penalties or fees, you may be owed a refund.”
As of right now, since the IRS is totally opposed to this, it’s expected that the Department of Justice will appeal the ruling.
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But in the meantime, American taxpayers must make a claim to ensure they get the refund, if it is ultimately approved. And you have to file for the refund before July 10.
And in more good news, the NTA says that—unlike most favorable tax rulings—"Many taxpayers affected by this issue have low and moderate incomes.”
They said the ruling could mean refunds for tens of millions of Americans, many of whom do not have tax advisors or accountants who can dig through the IRS’ complicated rules.
But it may also affect businesses—large and small, those who filed late international information returns, estates, trusts, and even people who were assessed penalties even though they didn’t owe any tax.
Who Qualifies for the Tax Refunds
You may be entitled to a refund if you were:
- Assessed penalties for failure to file timely returns, failure to pay taxes, or failure to make estimated tax payments.
- Charged interest that began accruing earlier than it should have, or not at all
- Overpaid interest for the 2020–2023 disaster period.
The NTA further stated, “Some practitioners believe that even where the underlying liability arose before the disaster period began, you may not have had to pay interest or penalties during that period.”
You’ll need to go back and look at your tax transcript to see if you received any penalties or interest during the tax filing pause. You can download your tax account transcripts by registering to use the Individual Online Account (https://www.irs.gov/payments/online-account-for-individuals), or by mail (https://sa.www4.irs.gov/oat/), or by phone (800-908-9946).
The transcript will detail year-by-year tax information, including filing status, taxable income, adjustments made after the original return was processed, payments, penalties and interest with dates they were made or assessed.
Now is the time to consult a tax expert, as you don’t want to miss out on this potential opportunity for a refund.
But if you want to self-serve a possible refund, here’s the IRS site/form to use: https://www.irs.gov/pub/irs-pdf/f843.pdf. You have two options: 1) Ask for the refund of the amount you have paid; or 2) An abatement, meaning a reduction or elimination of what you were told you owe. Note: You cannot submit this form electronically.
You’ll need to specify that you are filing for a protective claim (https://www.irs.gov/pub/irs-wd/0547011.pdf). The IRS recommends that you write, “Protective Refund Claim Pursuant to Kwong Case” on the claim form. This will preserve your right to claim a refund should the ruling be approved after the potential appeal process, as it will “prevent the period of limitations from expiring while waiting for a final resolution.”
Of course, this could be a long and drawn-out appeals process—maybe even years—so as my mother used to say, “Don’t count your chickens until they are hatched.”
But I say, don’t miss this opportunity … just in case.
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