Oodles of taxpayers — from the very well off to the barely making it — could be owed a chunk of change from the Internal Revenue Service after a complex court decision involving what rules did and didn’t apply during the COVID-19 pandemic.
Like anything else relating to taxes, it’s not going to be simple to get your money — or even to figure out if you’re owed a refund related to some penalties and interest assessed years ago. These refunds are not automatic; you won’t stumble upon a check out of the blue here. Most taxpayers will need to rush to file a special tax form by July 10 if they hope to see any relief.
The National Taxpayer Advocate began publishing a series of online blogs in late April to better explain the potential refunds — and why many everyday households need to act now to potentially get some cash.
We’re looking at the 2019, 2020, 2021 and 2022 tax years. You could be affected if you filed a tax return late between January 20, 2020, and July 11, 2023.
Who may miss out on IRS COVID tax refunds and relief
Unfortunately, many taxpayers who need cash the most face the greatest risk of missing an opportunity to claim a potential refund.
“Taxpayers without representation, particularly lower-income taxpayers, may never hear about it and may lose their rights to refunds,” according to the National Taxpayer Advocate’s blog.
Many low- and moderate-income households do not have easy access to professional tax help and, frankly, do not have enough extra time on their hands to juggle one more mindboggling chore.
Who is even paying attention to tax cases in the courts? Not someone who is slashing items off their grocery list to save money so that they can buy gas at $5 a gallon.
It’s a huge topic among tax professionals, though.
How penalty abatements and refunds work
Christina Wease, the director of the Alvin. L. Storrs Low-Income Taxpayer Clinic at Michigan State University, said the clinic plans to submit abatement requests and refund claims for penalties and interest assessed during the pandemic for its clients.
The clinic is at capacity right now and cannot take on more clients.
Wease explained that an abatement request is what would, essentially, cancel or remove the penalties and interest.
Generally, and it’s likely to apply here, she said, taxpayers have to request abatement or removal of the penalty and interest and a refund of any amounts paid to the abated penalties and interest.
If someone just requested a refund, she said, the IRS likely would deny it because it would see the penalty and interest assessed. In this pandemic related case, she said, the IRS does not seem to be doing any internal, automatic removal of penalty and interest removal. Instead, it’s going to be up to the taxpayer to request it.
Why the July 10 deadline matters
Wease said taxpayers in these circumstances could be entitled to have penalties and interest abated even if they did not pay those penalties and interest during the pandemic. They’d submit a Form 843 but not request a refund because they did not pay anything toward penalties and interest.
Another group of taxpayers paid what they were assessed in penalties and interest, Wease said, and these taxpayers would submit an abatement request and a refund claim for the amounts paid toward penalties and interest. You’d still use Form 843.
What’s troubling is that most people need to file by July 10 to figure it out and then complete and file Form 843. You’d file what’s referred to as a “protective claim” to allow you to preserve your right to a refund while the law is still uncertain, according to the National Taxpayer Advocate’s blog.
If you did not file your 2019, 2020, 2021, or 2022 federal income tax return or did not receive the economic stimulus payments, experts recommend that you should file as soon as possible and no later than July 10. Many taxpayers who didn’t file could still be entitled to tax refunds for those years.
“If taxpayers do not act by that date, they may permanently lose the ability to recover this refund,” according to a blog post by the National Taxpayer Advocate, who is trying to build awareness of the unique tax refunds.
The National Taxpayer Advocate explains that law authorizes the IRS to issue a credit or refund when you have overpaid your taxes, including penalty and interest. Generally, you must file a claim for credit or refund before the later of the following dates:
Why this refund opportunity exists
I’ve got to admit that I enjoy writing about tax twists, but even my eyes glazed over when I first heard about the Kwong v. United States ruling in the U.S. Court of Federal Claims a few months ago. The argument boiled down to whether penalties and interest could be assessed if tax deadlines were effectively extended under the law during the COVID-19 federal disaster period, which essentially ran 3.5 years.
The court ruled in November 2025 in favor of taxpayers, indicating that tax filing and payment deadlines essentially were paused when Congress gave a break in late 2019 to disaster victims mainly with localized hurricanes in mind, not necessarily contemplating national health emergencies.
And that’s why we’re discussing these kind of refunds now.
When will you see the money? Who knows? Many expect the Department of Justice to appeal the decision. And the money would not be paid out as any court challenges continue.
Why lower and middle income taxpayers should act now
The well-to-do can likely pay tax professionals to figure things out and file the form called a “Claim for Refund and Request for Abatement” by July 10 to lock in any potential refund.
The rest of us need to step back, take a breath and dig up some paperwork to figure out if we’re owed any money.
The potential size of the refunds will vary significantly among taxpayers, starting at perhaps around $100 to possibly a few thousand dollars or more for many individuals.
Some higher-income taxpayers reportedly could be owed hundreds of thousands of dollars or more. Some big corporations are eyeing massive amounts of money.
Expect to hear more before July about how people could be able to get special income tax refunds. But remember, the deal doesn’t apply to everyone and you must take a pre-emptive step by July 10, if you qualify.
The National Taxpayer Advocate notes that the issue is widespread, not just limited to a select group. We’re talking about self-employed workers, those who receive W-2s on the job, small businesses, large corporations, and more.
Maybe, you did not withhold enough in federal income taxes out of each paycheck during the pandemic years and you owed so much for the year that you faced an underpayment penalty.
Maybe, you are self-employed or had significant investment income and did not pay sufficient estimated tax.
Maybe, the check you mailed to cover taxes owed got lost and you faced late payment penalties and some interest.
The issue involves taxpayers with obligations related to income, employment, estate, gift, and excise taxes, according to the National Taxpayer Advocate. It may also affect taxpayers who filed late international information returns, which can result in significant penalties even when no tax is due.Clearly, if more people know about the potential refund — and tap into some tax hacks — it is possible that more everyday households could claim money they’re owed. You could talk to your tax professional, but it’s wise to do some research on your own, too.
What might be refunded for COVID-19 tax relief?
Here’s a look at what might be refunded in interest and penalties, according to the National Taxpayer Advocate:
You’d go back and look at your tax files to see if you paid interest or penalties during this time frame. (Some interest and penalties won’t be refundable, such as in cases of fraud.)
How to find an account transcript
The fastest way to get this information could be to get your tax transcripts by going through your Individual Online Account or online Business Account at IRS.gov.
If you don’t have an account, you’d need to create one.
If you’re unable to register or you prefer not to use Individual Online Account, the IRS notes that you may order a tax return transcript through an online system to get a transcript by mail.
Or you can call the IRS transcripts hotline at 800-908-9946. Allow five to 10 calendar days for delivery. The IRS does not charge a fee for an account transcript.
To access an online account, the National Taxpayer Advocate notes, taxpayers must go to IRS.gov to create an account. Once verified and authenticated, they can go to the “Records and Status” section, click on “View Tax Records,” and then select “View Transcripts” to see the available transcript options by year.
You want to access your “Account Transcript” to find out what penalties and interest were charged in those years.
“For taxpayers evaluating potential COVID-19 period refunds and abatements, timing is critical,” the National Taxpayer Advocate notes.
“A tax account transcript can help identify whether penalties and interest occurred during the COVID-19 disaster relief period (January 20, 2020, through July 10, 2023).”
You’d look for things on those transcripts such as lines that indicate a penalty for late filing, failure to pay tax penalty and interest charged.
Yes, you likely owed those penalties under normal conditions if you didn’t meet deadlines.
But if the return was submitted during the COVID-19 pandemic and before July 11, 2023, the National Taxpayer Advocate noted the COVID-19 relief rules may apply. In that case, the penalties and interest may have been charged incorrectly and could be eligible for refund or abatement.
Some basic steps when reviewing your account transcript:
What is Form 843 and how do you submit it to the IRS?
You would file Form 843 to claim a potential refund or abatement for penalties and interest.
The National Taxpayer Advocate notes that when you’re filing a protective claim, such as this one, taxpayers are not required to calculate the exact amount of the requested refund or request an immediate refund.
The claim involving Covid relief should state that your claim is based on the COVID-19 disaster relief period and the legal reasoning reflected in the Kwong decision, according to the National Taxpayer Advocate.
Identify the specific tax year or years involved. Include your name, address, Social Security number, Individual Tax Identification Number or Employer Identification Number, and contact information, according to advice from the National Taxpayer Advocate.
Taxpayers also may use Form 843 to request that the IRS to abate, or remove, penalties and interest that have been assessed but not yet paid.
“In most cases,” the National Taxpayer Advocate indicates, “taxpayers should file a separate Form 843 for each tax period and type of tax.”
And, yes, you might consider supplying copies of supporting documents, such as a copy of your transcript with relevant entries highlighted.
You’d need to mail in Form 843 to the correct service center for your state or area. The IRS offers some guidance at “Where to file (for Form 843)?” at IRS.gov.
You’re going to mail this form to the IRS service center where you would file a current-year return for the tax involved.
Michigan taxpayers, for example, would want to use the following mailing address to send in Form 843: Department of Treasury; Internal Revenue Service; Ogden, UT 84201-0002.
Another tip: Send claims via certified mail with return receipt and keep a complete copy of everything submitted.
Easy? Not at all.
But the blogs offered by the National Taxpayer Advocate can walk you through some steps. Your tax professional also might offer suggestions.
If you are asking your tax preparer to file the form, weigh the tax preparation fees with the dollar amount for your potential refund. And again, we don’t know if or when you’d get any money.
As with any complex tax situation, the risk of being targeted by a scammer is high. You do not want to fall for aggressive marketing schemes that promise quick refunds or guaranteed results.
Stay away from con artists who claim they’ll be able to help you but, instead, will steal your valuable ID information or money.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: You could be owed IRS refund from COVID‑era penalties — if you act soon
Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press
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