Somewhere in the IRS’s records, there is a line item showing a penalty or interest charge you paid during the pandemic. Maybe it was a late-filing penalty from 2020, when your accountant’s office was closed and the mail felt unreliable. Maybe it was interest that piled up on a balance you could not pay while your business was shut down. Whatever the specifics, the federal government collected that money, and a growing body of legal authority now suggests it may not have been entitled to keep it.
The catch: you likely have until July 10, 2026, to ask for it back. That is roughly 61 days from the date of this article’s publication in May 2026.
The Taxpayer Advocate Service (TAS), the independent watchdog that operates inside the IRS, completed a three-part blog series in May 2026 laying out exactly how to file IRS Form 843, the document that could determine whether millions of Americans recover penalties and interest the government collected during the COVID-19 emergency. The instructions are detailed, the form is free, and the stakes for procrastinators are permanent: miss the deadline, and the right to that money almost certainly vanishes.
The court ruling that cracked open a refund window
This refund opportunity did not come from Congress or from the IRS itself. It came from a courtroom.
In November 2025, the U.S. Court of Federal Claims ruled in Kwong v. United States (179 Fed. Cl. 382) that certain penalty and interest assessments during the COVID disaster period may have been improper. The core reasoning: federal disaster-relief rules, codified at 26 CFR 301.7508A-1, paused or extended key statutory deadlines during the national emergency. If those deadlines were extended, then penalties for missing them should not have been imposed in the first place, and interest tied to those penalties should not have accrued.
It is important to understand that Kwong is a trial-level decision, not an appellate ruling. It does not bind the IRS nationwide. But it established a legal foothold that the TAS has since built its guidance around.
In an April 2026 blog post, the TAS warned that “tens of millions of taxpayers” may qualify for refunds of penalties and interest assessed or collected between January 20, 2020 (when the COVID-19 national emergency was first declared), and May 11, 2023 (when it was terminated). Under the disaster-relief regulation, that window is extended by 60 days for tax purposes, pushing the effective end date to July 10, 2023.
The deadline math from there is straightforward. Taxpayers generally have three years to claim a refund under Internal Revenue Code Section 6511(a). Three years from July 10, 2023, is July 10, 2026.
Who should pay attention
This is not limited to people who filed late in 2020 or 2021. The refund opportunity potentially covers anyone who had penalties assessed or interest collected during the full disaster period, even if the underlying tax return was from an earlier year. Common examples include:
- Late-filing penalties charged on returns due (or extended) during the disaster period.
- Late-payment penalties applied to balances that were outstanding between January 2020 and July 2023.
- Interest charges tied to postponed due dates or balances that accrued during the disaster window.
One important note: the IRS already granted automatic penalty relief for certain 2019 and 2020 tax returns through Notice 2022-36. If you received that relief, you may have already recovered some of what you were owed. But Notice 2022-36 was narrower than the disaster-period tolling theory at issue here. It covered only failure-to-file penalties for specific tax years, not the broader universe of penalties and interest that the Kwong ruling and TAS guidance address. So even if you benefited from the 2022 relief, you may still have additional money to claim.
The TAS guidance does not attempt to catalog every qualifying scenario, because the interaction between disaster-period tolling and the various penalty and interest statutes is genuinely complex. But the agency’s core message is blunt: if you paid any penalty or interest to the IRS during that window, it is worth investigating whether you have a claim.
A practical first step is to check your IRS account transcript, which you can pull online through your IRS.gov account or request by filing Form 4506-T. The transcript will show exactly which penalties and interest charges were assessed and when, giving you the raw data you need to evaluate a claim.
How to file Form 843
Form 843, “Claim for Refund and Request for Abatement,” is the vehicle for this process. It is two pages long, there is no filing fee, and the TAS blog walks through each field. But the TAS guide draws an important distinction between two types of filings, and choosing the right one matters.
A formal refund claim asks the IRS to return a specific dollar amount you already paid. To file one, you need to identify the tax year, the type of tax, and the type of penalty or interest at issue. You then write a narrative explanation of why the amounts should be refunded, citing the disaster-period tolling rules and, where relevant, the Kwong decision. Attach supporting documents: IRS notices, account transcripts, or proof of payment.
A protective claim is for filers who believe they may qualify but are not yet sure of the exact amount or the full legal basis. Under the IRS’s own Internal Revenue Manual (section 25.6.1), a protective claim does not need to state a dollar figure or demand an immediate refund. It must, however, meet three requirements:
- Identify the specific tax year or years involved.
- Describe the contingency that could trigger the refund (in this case, the disaster-period tolling and the Kwong ruling).
- Be written in “clear and definite terms.”
Think of a protective claim as planting a flag. You are telling the IRS you have a potential claim, and you are filing it before the deadline so you do not lose the opportunity if the law later confirms you are owed money. For many filers, this is the more realistic option right now, given the legal uncertainties.
Form 843 must be filed by mail. The TAS guide does not indicate an electronic filing option. The mailing address depends on where you live; the IRS provides address tables in the Form 843 instructions. Given the July 10 deadline and the IRS’s well-documented mail processing delays, filers should send claims by certified mail with a return receipt requested. That postmark becomes your proof of timely filing if the IRS later questions whether you met the deadline.
What the IRS has not confirmed
Taxpayers should go into this process with their eyes open about what remains unsettled.
The IRS itself has not issued a standalone statement endorsing the TAS’s interpretation of the July 10, 2026, deadline. The TAS operates independently within the IRS, and its guidance, while authoritative and well-reasoned, does not bind the IRS’s processing divisions. Whether the IRS will process claims consistently under the TAS’s reading of the disaster-relief regulations has not been publicly addressed by the agency as of June 2026.
The Kwong ruling could also face further legal developments. No publicly available post-decision filings or appeals have surfaced as of this writing, but the government could still seek to narrow or overturn the decision in a higher court. If an appellate court later limits Kwong‘s scope, some filers who claim refunds now might ultimately be denied. Conversely, if Kwong is affirmed or other courts adopt similar reasoning, the pool of eligible taxpayers could expand significantly.
There is also the practical question of how uniformly IRS staff will handle these claims. The Internal Revenue Manual recognizes protective claims, but front-line processors may not yet have detailed instructions tailored to COVID-era penalty and interest assessments. That could mean inconsistent treatment: some claims acknowledged quickly, others delayed or rejected on procedural grounds. The TAS has said it will monitor processing patterns and may intervene in systemic cases, but individual filers should be prepared for long waits or the need to appeal within the IRS.
None of these uncertainties, however, is a reason not to file. The entire point of a protective claim is to preserve your rights while the legal picture clarifies.
Whether to hire a tax professional
For taxpayers with straightforward situations (a single penalty on a single tax year, with a clear IRS notice showing the amount), filing Form 843 independently is manageable. The form is not complicated, and the TAS blog provides enough detail to fill it out correctly.
But for filers with multiple tax years in play, overlapping penalties and interest, or audit-related assessments, the analysis gets complicated quickly. The disaster-period tolling interacts with different statutes depending on the type of penalty, and getting the narrative explanation wrong could weaken a claim. An enrolled agent, CPA, or tax attorney familiar with IRS penalty abatement procedures can help ensure the claim is filed correctly and positioned for the strongest possible outcome.
One reassurance for anyone hesitant: submitting Form 843 does not trigger an audit or invite additional scrutiny. The only real cost of filing is the time it takes to prepare the paperwork and a certified mail stamp.
What happens after you file
The IRS does not publish a specific processing timeline for Form 843 claims. In normal circumstances, refund claims can take several months to process. Given the potential volume of COVID-era claims and the novelty of the legal theory involved, filers should realistically expect delays that could stretch well beyond the typical timeframe.
If the IRS denies your claim, you generally have the right to appeal within the IRS through the Office of Appeals, or to file suit in federal court. For protective claims, the IRS will typically hold the claim in suspense until the contingency you described is resolved, then process it. You will not receive a refund check while the claim is pending in suspense, but your filing date is locked in.
You can check whether the IRS has received and logged your claim by calling the IRS or reviewing your account transcript after a reasonable processing period. Keep copies of everything you send, including your certified mail receipt.
61 days is less time than it sounds
Much of the legal landscape around COVID-era penalty refunds will take years to fully resolve. Courts may weigh in further. The IRS may issue formal guidance. Congress could act. None of that is within any individual taxpayer’s control.
What is within your control is whether you file before July 10, 2026. A timely claim, even an imperfect protective one, keeps the door open. Doing nothing guarantees you lose any chance of recovery, no matter how the law eventually settles.
The TAS’s advice boils down to a single principle: when the deadline is firm but the law is still developing, file now and sort out the details later. For the tens of millions of taxpayers who may be affected, that is advice worth acting on before the calendar 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.
