Full Breakdown
Millions of Americans May Be Eligible for IRS Pandemic Tax Refunds
3/18/2026, 5:00:15 AM
Court Ruling Expands Tax Deadline Relief
A recent ruling by the U.S. Court of Federal Claims in the case of *Kwong v. United States* has opened the door for millions of Americans to potentially receive tax refunds due to penalties incurred during the COVID-19 pandemic. The court determined that federal tax deadlines should have been postponed for the duration of the pandemic, from January 20, 2020, to May 11, 2023, plus an additional 60 days. This interpretation of tax code Section 7508A(d) suggests that the deadlines for tax filings from 2019 through 2022 should have been extended to July 10, 2023.
As a result, any individual or business that faced penalties or interest on late tax filings during this period may be eligible for a refund. For instance, Western Digital, a digital storage solutions firm, has already initiated a lawsuit seeking a partial refund of $53.6 million paid in taxes, arguing that nearly $21 million in interest charges were unjust due to the disaster period.
Eligibility and Filing Process
Taxpayers who were charged penalties or interest between January 20, 2020, and July 10, 2023, should review their tax records to determine eligibility for a refund. The deadline to file for a refund is July 10, 2026, which is critical as claims typically have a three-year statute of limitations or two years from the time the tax was paid, whichever is longer.
To request a refund, individuals can access their tax transcripts through the IRS website or request a copy via mail or phone. Taxpayers are advised to file IRS Form 843, specifying that the claim is a protective one related to the *Kwong v. United States* decision. This will ensure that the refund request is held during the appeals process, which the IRS is expected to initiate.
Expert Opinions and Implications
Tax experts emphasize the importance of filing claims before the deadline to preserve the right to refunds. Jon Wasser, a tax partner at Fox Rothschild, noted that "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."
Jon Gustafson from Venn Tax and Bookkeeping reiterated the urgency, stating, “Even though you might not get it, because the IRS might win the court case, you might as well try now.”
Conflicting Reports and Future Considerations
While the court ruling has provided clarity on tax deadlines during the pandemic, the IRS's potential appeal introduces uncertainty regarding the final outcome. Taxpayers are encouraged to act swiftly to secure their claims, as the outcome of the appeal could affect the availability of refunds.
Verbatim Quotes
- “Because it was a disaster for those three years, technically the courts have said the taxes were not due at all during those times,” — Jon Gustafson, Venn Tax and Bookkeeping
- “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,” — Jon Wasser, Fox Rothschild
This situation underscores the importance of understanding tax obligations and rights during federally declared disasters, as millions may benefit from this unprecedented ruling.
