IRS May Owe You A Refund For COVID-Era Fines. Here’s How To Apply
Millions of taxpayers who were hit with IRS penalties during the COVID-19 pandemic may be eligible for refunds or relief from those fines.
The penalties were issued for late tax filings, unpaid taxes, or missed estimated tax payments between January 2020 and July 11, 2023.
The relief is not automatic for most people. Taxpayers must submit a claim for a refund or penalty abatement by July 10 in order to protect their right to receive money back.
The issue stems from a federal court case, Kwong v. U.S., which ruled that emergency COVID-19 laws effectively extended tax filing deadlines during the pandemic. As a result, the court found that some penalties assessed by the IRS may have been improper. Although the case is still ongoing, taxpayer advocates are urging people to act before the deadline.
The IRS issued more than 120 million penalties during the affected period, impacting tens of millions of taxpayers. The National Taxpayer Advocate says the problem is widespread and could especially affect low- and moderate-income individuals who may not realize they qualify for relief.
Tax experts recommend reviewing IRS account transcripts to identify penalties assessed during the pandemic years. Eligible taxpayers may include those who:
- Filed tax returns late between Jan. 20, 2020, and July 11, 2023
- Paid penalties for late filing or payment
- Still owe penalties that have not yet been paid
- Filed international information returns late
To request relief, taxpayers should complete IRS Form 843 and mail it to the appropriate IRS service center. Tax professionals stress that filing the claim now preserves a taxpayer’s right to a refund if the court ruling ultimately stands.
Source: NBCDFW 5 News
