Consider a self-employed taxpayer who owed $10,000 in federal taxes during 2021 and was charged failure-to-pay penalties for 18 months while a COVID-19 deadline extension was technically in effect. That taxpayer may have accumulated roughly $900 in penalties plus daily compounding interest, money the IRS arguably should never have collected. Multiply that across tens of millions of potentially affected filers, and the scale of improperly assessed charges becomes staggering. Yet the IRS has not proactively told these taxpayers they may be owed money. And unless you mail a specific two-page form, IRS Form 843, postmarked by July 10, 2026, your legal right to claim a refund disappears for good.
The National Taxpayer Advocate (NTA), an independent watchdog inside the IRS, raised the alarm in an April 2026 blog post, estimating that tens of millions of taxpayers may be eligible for significant refunds tied to COVID-19 disaster declarations. That figure comes from the Advocate’s office, not from an IRS-confirmed count. The refunds are not automatic. For most people, claiming the money requires filing Form 843 before the deadline, and the form cannot be submitted electronically.
Why the IRS may have overcharged you
Under 26 U.S.C. §7508A, the IRS has authority to push back filing and payment deadlines during a federally declared disaster. When the COVID-19 national emergency triggered that provision, the agency postponed due dates for affected taxpayers across multiple tax years. But its systems still assessed penalties and interest during the postponement window as though the original deadlines had not moved. If your deadline was legally extended and the IRS charged you for missing the old one, that charge may have been improper.
The IRS partially acknowledged the problem in 2022. Through Notice 2022-36, it granted automatic relief for certain failure-to-file penalties on 2019, 2020, and some 2021 returns, along with select international information return penalties, provided the returns were filed by a specified cutoff. That program helped millions of taxpayers, but it was narrow by design. It did not touch failure-to-pay penalties, interest charges, estimated tax penalties, or other assessments that accumulated during the broader disaster window. If you owed money in any of those categories, the IRS did not send a refund on its own. Even if you received relief under Notice 2022-36, you may still have other charges that qualify for a separate refund.
Where the July 10, 2026 deadline comes from
Federal law (26 U.S.C. §6511) generally requires refund claims to be filed within three years of the return filing date or two years from the date the tax was paid, whichever is later. The IRS set July 10, 2023, as the end of the COVID-19 disaster postponement period for a large group of taxpayers. Because the IRS treats certain payments as made on the applicable return due date, the three-year lookback from July 10, 2023, lands squarely on July 10, 2026.
The Taxpayer Advocate Service confirmed this deadline in a May 2026 guidance post, urging taxpayers to act immediately rather than wait for the IRS or Congress to implement broader relief. Their message was blunt: file now or risk losing the money permanently.
What you need to do before July 10
The Taxpayer Advocate Service recommends filing either a formal claim or a protective claim for refund using Form 843. Here is the step-by-step process:
- Pull your IRS account transcripts. Request them online through your IRS Online Account or by filing Form 4506-T. Look specifically for penalty and interest charges assessed between 2020 and 2023.
- Identify penalties tied to the disaster period. Focus on failure-to-pay penalties, interest accruals, and estimated tax penalties assessed while COVID-19 postponement dates were in effect. If you already received relief under Notice 2022-36 for failure-to-file penalties, those are separate and already handled. You are looking for everything else.
- Complete Form 843. Reference 26 U.S.C. §7508A and the COVID-19 federally declared disaster as the basis for your claim. Specify the tax period(s), the type of penalty or interest, and the dollar amount you are requesting back. Be as precise as your transcripts allow.
- If the exact refund amount is unclear, file a protective claim. A protective claim preserves your right to a refund while the legal questions are still being sorted out. On Form 843, note that the claim is protective and describe the basis for relief. This keeps your claim alive if courts or the IRS later confirm that certain penalties were wrongly assessed, even if you cannot pin down the exact dollar figure today.
- Mail the form to the IRS. Form 843 cannot be e-filed. Send it to the IRS service center where you filed your original return (the correct address is listed in the Form 843 instructions). Use certified mail or a private delivery service with tracking so you have proof it was postmarked before July 10, 2026. That postmark is your legal protection.
What happens after you file
Do not expect a fast turnaround. The IRS typically takes several months to process Form 843 claims, and complex or protective claims can take longer. You will receive a written notice either approving or denying the refund. If denied, you have the right to appeal through the IRS Independent Office of Appeals or, ultimately, to file suit in U.S. Tax Court or federal district court.
One important note: filing Form 843 does not pause any existing payment obligations. If you are on an installment agreement with the IRS, keep making payments. The refund claim runs on a separate track.
Legal questions still unresolved
As of early June 2026, the full scope of who qualifies remains an open question. The IRS has not issued blanket guidance specifying every penalty type covered by the disaster-period interpretation of Section 7508A. No published federal court decision has definitively settled how broadly that statute applies to COVID-era penalty refunds, though several cases working through the U.S. Tax Court and federal district courts could produce rulings later in 2026 that push the IRS toward broader automatic abatements.
That legal uncertainty is exactly why the Taxpayer Advocate is pressing people to file protective claims now. A protective claim costs nothing beyond postage and preserves your position. If you wait for a definitive answer and the deadline passes, you forfeit your right to a refund, even if the law ultimately supports your case.
Who should review their records
This is not limited to individual filers. Small businesses, self-employed taxpayers, estates, and trusts that owed penalties or interest to the IRS during the 2020 through 2023 disaster period should pull their transcripts and assess whether a claim is worth filing.
To put the potential dollars in perspective: the failure-to-pay penalty alone runs at 0.5% of unpaid tax per month, capping at 25% of the balance under IRC §6651(a)(2). A taxpayer who owed $10,000 and was penalized for 12 months would have accumulated $600 in failure-to-pay penalties alone. Interest is calculated separately and compounds daily at the federal short-term rate plus three percentage points. Over two or three years, combined penalty and interest charges on even a modest balance can climb into the thousands.
This relief applies only to federal penalties and interest. State tax agencies operate under their own rules, and a federal Form 843 filing will not affect any state-level charges. If you believe your state also assessed improper penalties during the pandemic period, check with your state’s department of revenue separately.
If you used a tax preparer or enrolled agent, contact them now. They can pull your transcripts and evaluate whether a formal or protective claim makes sense for your situation. The Taxpayer Advocate Service also offers direct assistance, particularly for taxpayers facing financial hardship or those who cannot resolve the issue through normal IRS channels. Low-income taxpayer clinics, funded by the IRS but operated independently, are another free resource. You do not need a tax professional to file Form 843 on your own, but if your situation involves multiple tax years or large balances, professional help can reduce the risk of errors that slow down processing.
Why the July 10 postmark is the only thing standing between you and a forfeited refund
The IRS has shown it can implement broad relief when it decides to. It did so in 2022 with Notice 2022-36. Whether it will do the same for the remaining penalty categories is unknown, and as of June 2026, no one inside the agency has signaled that a similar program is coming before July 10.
What is known is the deadline. Filing Form 843 before July 10, 2026, is the only way to keep a potential refund alive while the government decides how far this relief extends. A protective claim takes one afternoon and a few dollars in postage. Skipping it means walking away from money, potentially hundreds or thousands of dollars, that the government collected from you improperly and is legally required to return. But only if you ask before the clock runs out.
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.
