{"id":287059,"date":"2026-04-27T08:00:31","date_gmt":"2026-04-27T12:00:31","guid":{"rendered":"https:\/\/futbolete.com\/us\/?p=287059"},"modified":"2026-04-27T08:00:31","modified_gmt":"2026-04-27T12:00:31","slug":"irs-refunds-covid-era-penalties-or-interest","status":"publish","type":"post","link":"https:\/\/futbolete.com\/us\/irs-refunds-covid-era-penalties-or-interest\/","title":{"rendered":"The IRS Aims to Send Millions of Pandemic-Era Refunds: Here\u2019s Who Qualifies"},"content":{"rendered":"

Turns out the Internal Revenue Service (IRS)<\/strong> might have been charging people penalties and interest during the pandemic that it had no legal right to collect. And now a federal court has said as much.<\/p>\n

The case is Kwong v. United States, decided November 2025. It\u2019s not a small thing. What the judge found is that the IRS ignored its own deadline extensions under a disaster relief law. You\u2019ve got Section 7508A(d) of the tax code<\/strong> \u2013 that\u2019s the one that lets the government push filing dates when things go sideways. And COVID was about as sideways as it gets.<\/p>\n

Millions Paid Late Fees the IRS Maybe Couldn\u2019t Legally Take<\/h2>\n

From January 20, 2020, until May 11, 2023<\/strong>, the federal government treated the pandemic as a continuous disaster period. Under the law, the IRS<\/strong> was supposed to tack on another 60 days<\/strong> after that. So effectively, deadlines moved to July 10, 2023.<\/p>\n

But the agency didn\u2019t fully apply that timeline. It kept slapping people with late fees<\/strong> and interest<\/strong> as if nothing had changed. Already, big money is moving.<\/p>\n

A Lawsuit Settled It All<\/h2>\n

Western Digital filed a claim asking for over $20 million back<\/strong>. That\u2019s just interest they paid. But this isn\u2019t only for corporations. Ordinary people who paid any penalty or interest between January 2020 and July 2023<\/strong> could be in line for a refund.<\/strong><\/p>\n

Think about what that covers. Late payment penalties. Failure-to-file fees<\/strong>. Underpayment interest. Even if you eventually settled your full tax bill<\/strong>, but part of what you paid included those extra charges from that window \u2013 you might qualify.<\/p>\n

That means retirees who missed estimated payments<\/strong>. Freelancers who filed late because they were sick. Small business owners who just couldn\u2019t keep up during lockdowns.<\/p>\n

One tax preparer I spoke with said most clients have no idea this is even an option. \u201cThey assume once they paid the IRS, it\u2019s over,\u201d she told me. \u201cBut the law is the law<\/strong>. If the IRS didn\u2019t follow it, you can ask for your money back.\u201d<\/p>\n

You Have to Ask: The Time is Running Out to Claim the Refund<\/h2>\n

And you don\u2019t have forever. Standard rules give you three years<\/strong> from when you filed your return, or two years from when you paid the tax \u2013 whichever comes later \u2013 to file a claim. Because the extended pandemic deadline landed on July 10, 2023<\/strong>, a lot of people will hit a wall around July 10, 2026<\/strong>. Wait past that, and the statute of limitations shuts the door.<\/p>\n

There\u2019s another wrinkle. The IRS could appeal the Kwong decision. If that happens, refunds might get delayed or the ruling could get narrowed. That uncertainty is exactly why some tax pros are telling clients not to sit around.<\/p>\n

What Do You Actually Have to Do?<\/h2>\n

First, pull your IRS tax transcripts<\/strong>. You can get them online through the IRS transcript tool or by calling 800-908-9946. Look for any penalties or interest charged between January 20, 2020, and July 10, 2023<\/strong>. If you see them, you file Form 843. That\u2019s the claim form for refunds of penalties and interest. Attach a short note mentioning Kwong and the extended disaster period.<\/p>\n

Is it a sure thing? No. Courts can be unpredictable. But the legal reasoning is solid, and the window is real<\/strong>. Millions of Americans paid the IRS more than they should have during the pandemic. A judge just said those payments might not have been legal. Getting that cash back isn\u2019t guaranteed \u2013 but not trying almost certainly leaves it on the table.\u00a0And for a lot of households right now, every dollar counts.<\/p>\n","protected":false},"excerpt":{"rendered":"

Turns out the Internal Revenue Service (IRS) might have been charging people penalties and interest during the pandemic that it had no legal right to collect. And now a federal court has said as much. The case is Kwong v. United States, decided November 2025. It\u2019s not a small thing. What the judge found is […]<\/p>\n","protected":false},"author":4,"featured_media":287060,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":{"format":"standard","override":[{"template":"1","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"hide","share_float_style":"share-monocrhome","show_featured":"1","show_post_meta":"1","show_post_author":"1","show_post_date":"1","post_date_format":"custom","post_date_format_custom":"d\/m\/Y H:i","show_post_category":"1","show_post_reading_time":"0","post_reading_time_wpm":"300","post_calculate_word_method":"str_word_count","show_zoom_button":"0","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","number_popup_post":"1","show_author_box":"0","show_post_related":"1","show_inline_post_related":"1"}],"image_override":[{"single_post_thumbnail_size":"no-crop","single_post_gallery_size":"crop-715"}],"trending_post_position":"meta","trending_post_label":"Trending","sponsored_post_label":"Sponsored by","disable_ad":"0","subtitle":"A court ruling just changed the rules for millions who paid penalties or interest during the COVID pandemic"},"jnews_primary_category":[],"footnotes":""},"categories":[1],"tags":[44],"class_list":["post-287059","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-irs"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts\/287059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/comments?post=287059"}],"version-history":[{"count":1,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts\/287059\/revisions"}],"predecessor-version":[{"id":287061,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts\/287059\/revisions\/287061"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/media\/287060"}],"wp:attachment":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/media?parent=287059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/categories?post=287059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/tags?post=287059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}