NEWS / US tax court ruling entitles taxpayers to refund of COVID-era penalties and interest

Tens of millions of United States taxpayers may be entitled to a refund of late filing penalties and interest charged by the Internal Revenue Service (IRS) during the era of the COVID-19 pandemic. The United States of America was under a “public health emergency” between January 20, 2020, and May 11, 2023, meaning that the actual deadline to file US income tax returns for 2019, 2020, 2021, and 2022 was July 10, 2023.

“Millions of taxpayers could be eligible, but if people don’t file claims before July 10, 2026, they lose out on the potential for a refund or abatement,” Tax lawyer Jonathan M. Wasser, partner at Fox Rothschild, was quoted by USA Today as stating.

The court ruling, filed November 25, 2025, suggests that any late filing penalties charged for filing 2019, 2020, 2021, and 2022 tax returns may have been improper, provided those returns were filed by July 10, 2023.

According to USA Today, the IRS continues to disagree with the ruling, and the National Taxpayer Advocate (NTA) anticipates that the United States Department of Justice will appeal the decision. At the same time, taxpayers only have less than 2 months to claim a refund for the penalties and interest charged.

“Even if the IRS disagrees with the Kwong decision, I believe it has an obligation to inform taxpayers about their rights, so taxpayers don’t miss the claims deadline if the ultimate resolution of this issue supports their right to the refund or abatement of interest and penalties,” the NTA stated in their blog post.

In order to receive the refund, taxpayers, including individuals, corporations, partnerships, disregarded entities, estates, and trusts, would need to file IRS Form 843, Claim for Refund and Request for Abatement, specifying that it is a protective claim based on the Kwong v. United States decision regarding Section 7508A(d) and the COVID-19 disaster period.

Only one Form 843 needs to be filed, but every year for which taxpayers got charged penalties and interest should be referenced.

If you require assistance with filing IRS tax forms or filing for US tax residency certification (Form 6166), do not hesitate to contact us via e-mail at info@apostille.us or by phone at (212) 233-7061. You can also place an order on our website.