Tens of millions of taxpayers who paid late-filing or late-payment penalties on returns from 2020 through 2023 could be sitting on unclaimed refunds, but the window to act closes on July 10, 2026. The catch: claims must be submitted on paper using IRS Form 843, and electronic filing is not an option. The National Taxpayer Advocate has flagged the deadline in a public advisory, warning that those who miss it risk forfeiting their right to recover money already paid to the IRS.
Why the July 10 Form 843 deadline changes the calculus for penalty refunds
The IRS granted broad automatic penalty relief for certain 2020 and 2021 tax returns in an August 2022 notice, crediting or refunding failure-to-file penalties for millions of affected filers. That relief, however, did not cover every penalty type or every tax year touched by pandemic-era postponement rules. The question now is whether the IRS applied the mandatory postponement periods under Section 7508A too narrowly, leaving additional penalties on the table for 2020 through 2023.
Section 7508A allows the IRS to postpone certain tax deadlines for taxpayers affected by federally declared disasters or emergencies. During the COVID-19 emergency, the IRS issued multiple postponement notices, effectively shifting filing and payment due dates. If those postponements are later determined to have applied more broadly than the IRS initially recognized, some penalties that were assessed for “late” filing or payment during the affected periods may prove to have been improper.
If ongoing disputes or litigation confirm that the agency under-applied those postponement windows, taxpayers who filed a timely protective claim stand to recover penalties that were never automatically abated. Those who did not file a claim by the deadline would lose that right entirely, regardless of the outcome. That is why the July 10 date carries real financial weight: it is not a suggestion but a statute-of-limitations cutoff for preserving a refund claim.
The deadline matters even for taxpayers who already received some automatic relief. A person might have had failure-to-file penalties removed for 2020 but still paid late-payment penalties or interest that could ultimately be affected by how the postponement rules are interpreted. Filing a claim now keeps the door open in case later guidance or court decisions expand the scope of relief.
How protective claims and IRS procedural rules shape eligibility
The Taxpayer Advocate advisory, titled “Tens of Millions of Taxpayers May Be Eligible for Significant Tax Refunds,” urges taxpayers to consider filing a protective claim on Form 843. A protective claim is a formal request that preserves a taxpayer’s right to a refund while a legal or administrative question remains unresolved. It does not require the taxpayer to prove eligibility immediately; instead, it flags the years and issues involved so that the claim remains open until the underlying dispute is resolved.
Under the IRS’s own procedural rules, a valid protective claim must clearly identify the taxpayer, specify the tax periods at issue, and describe the contingency the claim depends on-here, the possibility that Section 7508A postponement rules are ultimately interpreted in a way that invalidates certain penalties. The claim must also be filed before the normal refund statute of limitations expires, which is why the July 10, 2026, cutoff is so critical.
Form 843 is the IRS’s standard vehicle for requesting refunds or abatements of many penalties, interest charges, and certain fees. According to the IRS page describing Form 843, taxpayers use it when they believe a penalty or interest assessment is incorrect or when they qualify for relief that was not granted automatically. Because the IRS does not accept this form electronically, taxpayers must print, complete, and mail it to the appropriate IRS address, keeping proof of mailing to establish that it was filed before the deadline.
In practice, a protective claim related to COVID-era penalties will generally reference the specific tax years (for example, 2020 through 2023), note that the taxpayer paid late-filing or late-payment penalties for those years, and explain that the claim is contingent on the ultimate interpretation of the Section 7508A postponement periods. The amount claimed can be estimated or left to be determined, as long as the IRS can understand the nature of the potential refund.
What taxpayers should consider doing now
Taxpayers who paid penalties on 2020–2023 returns should review their IRS account transcripts and prior notices to identify which amounts were assessed and whether any were already abated under the IRS’s earlier penalty relief initiative. If any uncertainty remains about whether additional relief might be available under a broader reading of the postponement rules, filing a protective claim before July 10, 2026, can safeguard potential refunds.
Because the rules are technical and the stakes can be significant, many taxpayers may benefit from consulting a qualified tax professional to help evaluate their situation, prepare Form 843, and ensure that the claim adequately describes the relevant years and contingencies. What matters most is not having every answer today, but meeting the procedural requirements in time so that, if the law ultimately shifts in taxpayers’ favor, their right to a refund is still intact.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
