For most filers, the tax deadline has come and gone. But thanks to a federal court decision, millions of Americans could still be eligible for tax refunds for pandemic-era penalties and interest.
The issue stems from recent rulings, including Kwong v. United States, which found that the IRS shouldn’t have assessed certain penalties and interest from Jan. 20, 2020, through July 10, 2023, That includes the Covid-19 federal disaster period through May 11, 2023, plus an extra 60 days. The court decision was based on an interpretation of a tax code provision that governs postponed filing and payment deadlines during a disaster.
If taxpayers filed returns and paid taxes on time, they generally have three years after the filing deadline to claim unpaid refunds, which brings the due date to July 10, 2026.
The court decision isn’t final, and the government could still appeal it.
But should the decision stand, it may offer a “major refund opportunity” for some filers, National Taxpayer Advocate Erin Collins wrote in an April 30 blog post. Collins heads the Taxpayer Advocate Service, an independent organization within the IRS.
