Taxpayer advocate warns of July 2026 deadline for COVID-era IRS refunds

I IRS taxpayer advocate issued notice that tens of millions of American taxpayers may be entitled to refunds or reductions in penalties and interest due to the postponement of filing deadlines under the COVID-19 emergency declaration.

The National Taxpayer Advocate said in a post Thursday that refunds or abatements may be available to tens of millions of taxpayers for penalties and interest assessed by the IRS over 3.5 years. A declaration of a COVID crisis the time.

It explained that the issue has arisen as a result of recent court decisions, including a decision in what is known as the Kwong case that the tax code for handling federal disaster declarations means that the deadline for filing and payment has been pushed back all the way from Jan. 20, 2020, until May 11, 2023.

A taxpayer advocate noted that the Justice Department could appeal the decision, but the exemptions mandated by the decision are not automatic and affected taxpayers must file their refund requests by July 10, 2026.

MISSED THE APRIL 15 TAX DEADLINE? HERE IS WHAT A PROFESSIONAL SHOULD DO

“Because the crisis did not appear for so long, many taxpayers, even many tax professionals, did not foresee it. to meet the deadline and payment deadlines will be postponed for such a long period of time that the return of forms and payments will not be considered late and therefore not subject to penalties and interest. But that is a logical extension of the court's decision,” wrote the National Taxpayer Advocate.

They went on to warn that barring further action by the IRS or Congress to ensure that all taxpayers affected by the ruling receive what they are owed, such taxpayers face a rapidly approaching deadline to file their claims.

AVERAGE TAX REFUNDS UP NEARLY 11% FROM LAST YEAR, IRS DATA SHOWS

Taxpayers will have to submit claims in paper form before the deadline, to prevent changes to the IRS process. (Jordan Vonderhaar/Bloomberg via Getty Images)

“Unless the IRS or Congress Measures to ensure that all affected taxpayers receive refunds if Kwong's decision is upheld, taxpayers seeking refunds for penalties and interest they paid related to that period, in most cases, will have to file claims by July 10, 2026,” explained the lawyer.

“At the risk of repetition, my main goal is to get the word out to as many taxpayers as possible and avoid mixed results between the 'well-advised' and the ignorant,” they said.

The taxpayers' attorney said that taxpayers involved may be entitled to a refund or reduction in assessed prices during the COVID period:

• Penalties assessed for failure to file timely returns, failure to pay taxes, or failure to pay estimated taxes;
• Children who started to appear before the time they should have, or not at all; again
• Overpayment interest during the 2020-2023 crisis period.

TAX REFUNDS ARE HUGE THIS YEAR, BUT 5 CITIZENS ARE PAYING THE MOST.

The COVID emergency declaration has delayed filing and payment deadlines, according to a recent court ruling. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

The notice warned that the IRS requires claims under Form 843 to be filed by paper mail, and because that filing may not provide immediate assurance of receipt, advised that taxpayers should mail the claims certified mail so that they have proof of their delivery on time in case the forms are lost.

The taxpayer advocate recommended that the IRS should comply with the Taxpayer Bill of Rights and take four steps, including informing the taxpayers of the issue, providing a six-month extension to file refund claims, considering providing systematic assistance for taxpayers not to file, and creating an electronic filing portal.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

It also urged tax professionals to inform clients about the issue, members of Congress to highlight the issue in their communications with voters, and for the media to report it to the public.