IRS COVID – A federal ruling may pause certain COVID-era tax penalties and interest. Here’s who may qualify and what to do by July 10, 2026.
A federal court decision is reshaping how millions of U.S. taxpayers may be treated for COVID-era tax penalties and interest, and the timing matters for the next wave of claims.
In a case involving the U.S.. Court of Federal Claims, Misryoum reports that the Kwong v.. United States decision effectively broadened the period in which federal tax deadlines were treated as paused.. The court concluded that the pandemic disaster-relief rules require the IRS to stop penalties and interest during the full disaster window. plus an additional 60 days—meaning some returns and payments that were previously considered late may not have been late for penalty and interest purposes.
This context is important because the decision hinges on whether penalties or interest were assessed during the COVID-19 disaster period Misryoum references as running from January 20. 2020. through May 11. 2023.. Under the ruling’s framework, those assessments would generally not become “late” for penalty and interest calculations until after July 10, 2023.
Misryoum also notes that the taxpayer advocate’s office has signaled the issue could be widespread.. Erin Collins. the national taxpayer advocate. wrote that tens of millions of taxpayers could be affected. potentially extending beyond individuals to small businesses. corporations. trusts. and estates.
Meanwhile, the relief described is not automatic.. According to Misryoum. taxpayers typically need to submit a claim to seek refunds or abatements of penalties and interest that the IRS assessed during the covered period.. In practical terms. eligibility centers on whether penalties were charged for late filings. late payments. or missed estimated tax payments. and whether interest began accruing earlier than it should have.
Misryoum adds that interest over the same timeframe may also be part of refund requests in certain situations, including scenarios involving overpayment interest.
To pursue a claim. Misryoum says taxpayers should start by reviewing their tax records and account information through their Individual Online Account on the IRS website.. The goal is to identify whether penalties or interest charges appeared during the 2020 to 2023 window described in the ruling’s reasoning.. If the account activity aligns with the issue, Misryoum reports that the next step is filing IRS Form 843.
Form 843 must be filed by July 10, 2026, per Misryoum’s coverage.. The taxpayer advocate also encouraged submitting by certified mail so there is proof of timely filing if a document is delayed or misplaced.. Misryoum further warns that if large numbers of claims are filed at once, processing may take longer.
In the end, this matters because the difference between a denied claim and a granted one often comes down to timing and documentation. If you were assessed penalties or interest tied to COVID-era dates, Misryoum suggests checking now rather than waiting for later correspondence.