Making it through the COVID-19 pandemic was hard enough, let alone if you were assessed IRS Penalties. The last thing anyone needed was the IRS breathing down their necks. But the reality is that tens of thousands of people missed their filing and payment deadlines for their taxes. And the IRS wasted no time in assessing penalties and interest. But that’s all changing now, and you may be eligible for refunds and abatements on your interest and penalty payments.
Tax code Section 7508A(d) requires the IRS to suspend filing and payment deadlines for taxpayers during federally declared disasters, but the IRS continued to assess late-filing and late-payment fees and to charge interest on late payments throughout that period, except for a brief 120-day period in early 2020.
In Kwong v. United States, the court refuted the IRS’s allegation that deadline relief lasted only for those 120 days, confirming that the IRS should have suspended deadlines for the entire period from January 20, 2020, to July 10, 2023. This court battle is still pending.
Now is the Time to Claim Your Refund
The IRS is appealing this decision and other related rulings and, therefore, isn’t automatically issuing refunds. As a result, you have to file your refund claim manually—and you likely have to do it immediately.
In general, you have three years from the date you filed your tax return or two years from the date you paid the tax to file for a refund or abatement. Based on the timeframe of the deadline relief, the deadline for most people to file for a refund is July 10, 2026. However, if you still owe tax, penalty, and interest from the Covid-19 era, you may still be eligible for penalty relief.
To determine whether you overpaid penalties and interest, look at your IRS notices and tax returns from 2020 to 2023. To make sure you’re not missing anything, it’s a good idea to access your IRS records on the online IRS Get Transcript portal. Next, look for any failure-to-file or failure-to-pay penalties and interest. If you see amounts that the IRS incorrectly assessed, use IRS Form 843, Claim for Refund and Request for Abatement, to file for your refund or abatement.
Highland Tax Group Can Help You Get Your Refund
The experts at Highland Tax Group can help you navigate this tricky task. We can access and review your tax records and file your refund request. We’ll hold the IRS accountable and help you reclaim what’s rightfully yours.