Taxpayers who paid failure-to-file or failure-to-pay penalties on returns from 2020 through 2023 face a hard deadline of July 10 to claim refunds, and the only way to do so is by mailing a paper Form 843 to the IRS. The National Taxpayer Advocate has warned that tens of millions of people may qualify for significant refunds tied to the COVID disaster-period postponement, but most will receive nothing unless they file an affirmative claim before the window closes. With fewer than 30 days left, the stakes are concrete and the process is entirely analog.
Why the July 10 Form 843 deadline carries real financial weight
The legal theory behind this refund opportunity traces to IRC Section 7508A(d), the statute that mandated deadline postponements during the COVID-19 national emergency. In the case of Kwong v. United States, the U.S. Court of Federal Claims analyzed the mandatory disaster period and identified July 10, 2023, as its endpoint. Because refund claims generally must be filed within three years of the relevant deadline, the corresponding cutoff for action falls on July 10, 2026. Taxpayers who paid penalties connected to returns originally due during the covered disaster period may therefore have a narrow, one-time opportunity to seek a refund.
The IRS did provide automatic failure-to-pay penalty relief for tax years 2020 and 2021 under certain conditions, specifically for taxpayers whose assessed tax was less than $100,000 and who received CP14 or CP161 notices between Feb. 5, 2022, and Dec. 7, 2023. But that automatic program did not reach everyone. Taxpayers who owed more than $100,000, those who paid failure-to-file penalties rather than failure-to-pay penalties, and those whose situations fell outside the narrow automatic relief criteria were left out. For those people, the only remaining path is an affirmative claim filed on paper, and missing the deadline could permanently forfeit any right to a refund of those penalties.
The paper-only requirement adds friction at the worst possible time. The National Taxpayer Advocate has emphasized that Form 843 cannot be e-filed, a limitation confirmed by IRS guidance. Every claim must be printed, signed, and mailed to an IRS campus, with proof of timely mailing especially important as the deadline approaches. A surge of paper filings in the final weeks before July 10 could slow processing at IRS service centers that already handle high volumes of correspondence during the summer months. No public IRS data exists on how many protective claims have already been submitted, making it impossible to gauge the current backlog or how long refunds might take to arrive.
What a valid protective claim requires under IRS rules
Taxpayers who are uncertain about their exact refund amount can still preserve their rights by filing what the IRS calls a protective claim. Under the Internal Revenue Manual, a valid protective claim must be clear and definite, identify the contingencies involved, and specify the tax year or years at issue. Filers do not need to state a precise dollar amount. This means a taxpayer can submit Form 843 before July 10 even if the exact penalty calculation has not been finalized, as long as the claim clearly states that it seeks a refund of failure-to-file or failure-to-pay penalties for designated years based on the COVID disaster-period postponement and the court’s interpretation in Kwong.
In practice, a protective claim should spell out the type of penalty being challenged, the tax period covered, and the legal basis for relief. Taxpayers can reference the statutory disaster postponement provisions and note that their return due dates fell within the mandatory relief window identified by the court. They should also explain any uncertainty, such as ongoing IRS examinations or pending account adjustments, and state that the exact amount of the refund will depend on those unresolved issues. Clarity on these points helps the IRS associate the claim with the correct account and ensures it remains open while the legal and factual questions are resolved.
How to complete and mail Form 843 before time runs out
The IRS describes the mechanics of filing on its page about Form 843, which is used to request a refund or abatement of certain taxes and penalties. For COVID-related penalty claims, taxpayers should complete the identifying information at the top of the form, check the box for “penalty” in the refund section, and specify whether they are seeking relief from failure-to-file or failure-to-pay charges. In the explanation area, they should briefly summarize why the penalties are being challenged, referencing the disaster postponement period and the July 10, 2026, limitations date. Attaching copies of IRS notices showing the penalties paid can further support the claim.
Because the deadline is based on timely filing, how the envelope is sent matters. Tax professionals generally recommend using a mailing method that provides a dated receipt, such as certified mail from the U.S. Postal Service, and keeping copies of everything submitted. The address for filing depends on where the taxpayer lives and whether the claim relates to an individual or business account, so filers should verify the correct service center address before sending. With the clock ticking toward July 10, waiting until the last few days increases the risk that a mailing delay or addressing error could push the filing past the statutory cutoff.
For taxpayers who paid COVID-era penalties and do not clearly fall within the IRS’s automatic relief programs, the decision point is immediate. Filing a protective Form 843 now preserves the possibility of a refund while the IRS and the courts continue to sort out the full implications of the disaster postponement rules. Failing to act before the deadline, by contrast, locks in the penalties as permanent, even if later guidance or litigation confirms that they should never have been imposed in the first place.
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.
