Many Americans may prefer to move past the memories of the COVID-19 pandemic, but revisiting that period could be worthwhile—especially for taxpayers who might qualify for refunds from the Internal Revenue Service (IRS), according to tax attorneys.
Under federal law, when a disaster is officially declared, certain tax deadlines can be postponed. A federal court ruled in November that the public health emergency related to COVID-19—from January 20, 2020, to May 11, 2023—qualified for this relief under Section 7508A(d) of the tax code. With an additional 60-day extension included, the effective deadline for filing taxes for the 2019 through 2022 tax years moved to July 10, 2023.
Because of this extended window, legal experts say the IRS may not have been allowed to charge penalties or interest during that period. If taxpayers were charged such fees, they could potentially request a refund. However, the agency may challenge the court’s decision, and taxpayers have limited time to act before the opportunity expires.
According to tax attorney Jon Wasser, millions of individuals and businesses could qualify, but claims must be filed before July 10, 2026. Missing that deadline would likely eliminate the chance to recover any refunded penalties or interest.
Anyone who paid penalties or interest between January 20, 2020, and July 10, 2023, may be eligible to seek reimbursement. Experts note that the amounts could be substantial, especially for companies that struggled financially during the pandemic and accumulated significant late-payment penalties.
One example is the case involving Western Digital, which filed a lawsuit seeking the return of a portion of the interest it paid on a tax settlement. The company argues it should not have been charged nearly $21 million in interest during the pandemic-related extension period.
Typically, taxpayers have three years from the date a return was filed—or two years from the date the tax was paid—to request a refund, whichever is later. Because the court decision effectively pushed the filing deadline to July 10, 2023, that means July 10, 2026, is expected to be the final day for taxpayers to submit claims for possible refunds or penalty relief.
