You may have an opportunity to recover penalties and interest paid to the IRS during the COVID-19 pandemic period, January 20, 2020 through May 11, 2023.
What Changed: A Key Court Decision
Recent court decisions, Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025), have raised questions about whether the IRS had the authority to assess certain penalties while federal disaster relief provisions were in effect.
For some taxpayers, that could mean meaningful refunds. But there’s an important catch: many taxpayers will likely need to act before July 10, 2026, to preserve their rights.
Who May Be Entitled to a Refund
You may be entitled to a refund if you were assessed:
- Penalties for failure to timely file returns, failure to pay taxes, or failure to make estimated tax payments;
- Interest that began accruing earlier than it should have, or not at all; and
- Overpayment interest for the 2020–2023 disaster period.
Now is the time to review your records and determine whether you may qualify.
How to File a Claim
Form 843
Many taxpayers seeking refunds will likely need to submit IRS Form 843, Claim for Refund and Request for Abatement. This form allows taxpayers to request refunds or reductions of penalties and interest they believe were improperly assessed. Currently, Form 843 generally must be submitted by mail rather than electronically.
Protective Claims
You can also file a protective claim, which allows you to preserve your right to a refund while the law is still uncertain. You do not need to calculate the exact amount of your requested refund. Typically, the IRS holds protective claims for refunds in suspense until the underlying issue is resolved by the courts, and the claim can be perfected by providing final numbers based on the court’s decision. This resolution could take years, and there is no guarantee of a refund.
Why Timing Matters
Refund claims tied to these issues may be subject to a statute of limitations deadline of July 10, 2026. Missing that deadline could permanently eliminate the ability to recover refunds, even if the taxpayer otherwise qualifies. Because processing delays are common, taxpayers should avoid waiting until the last minute to prepare and submit claims.
Please review whether this applies to your situation, and reach out to us as soon as possible to file a claim.
Have questions about whether you qualify for a refund? Contact Steve Vlasak, Partner in Richey May’s Alternative Investments Practice, at svlasak@richeymay.com to discuss your situation and next steps.
Sources: Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025) — govinfo.gov | IRS Form 843, Claim for Refund and Request for Abatement — irs.gov
