IRS Penalty Claims — Filing deadline: July 10, 2026. Acting before this date is the only way to preserve your claim.
IRS Penalties & Interest

A court ruling means
the IRS may owe
you money.

A federal court determined that the COVID-19 emergency extended tax deadlines through July 10, 2023 — meaning penalties and interest the IRS charged during that window may have been improper. Refund claims must be filed before the statute of limitations closes.

Check My Eligibility How It Works
Millions Taxpayers potentially eligible for COVID-era penalty refunds
2019–2022 Tax years covered by the court ruling
Jul 10, 2026 Deadline to file a protective refund claim
The IRS is expected to appeal. Filing a protective claim now costs very little — missing the deadline forfeits your right permanently. Experts recommend acting before July 10, 2026 regardless of how the appeal resolves.
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The Court Ruling

What happened and why it matters

During the COVID-19 national emergency (January 20, 2020 – May 11, 2023), the IRS continued to assess penalties and interest on late filings and payments. A November 2025 federal court decision changed the legal picture.

Court ruling
In Kwong v. United States, the U.S. Court of Federal Claims determined that the COVID-19 emergency qualifies as a federally declared disaster under IRC Section 7508A(d). This provision requires that tax deadlines be postponed for the duration of the emergency, plus 60 days — pushing the effective deadline to July 10, 2023.
What this means
If tax deadlines were legally extended to July 10, 2023, then penalties and interest assessed by the IRS before that date — for tax years 2019 through 2022 — may not have been valid. Taxpayers who paid those charges may be entitled to a refund or abatement.
Key Dates
1
Jan 20, 2020
COVID-19 national emergency declared
The federal emergency period begins. IRS continues assessing penalties through this period.
2
May 11, 2023
Public health emergency ends
Official end of the COVID-19 public health emergency. Plus 60 days = July 10, 2023.
3
November 2025
Kwong v. United States decided
Federal court rules that Section 7508A(d) applied to COVID — meaning the effective tax deadline for 2019–2022 returns was July 10, 2023.
!
July 10, 2026
Statute of limitations closes
Three years from the court's effective deadline. Missing this date permanently forfeits your right to a refund claim.
Eligibility

Who may qualify for a refund

Eligibility is broader than most people assume — but it is not automatic. You must have actually paid penalties or interest during the COVID disaster window. Charges that were waived or abated by the IRS do not qualify.

Filed or paid late between January 20, 2020 and July 10, 2023 and were charged a failure-to-file or failure-to-pay penalty.
Paid underpayment penalties or accrued interest on estimated tax shortfalls covering tax years 2019, 2020, 2021, or 2022.
Businesses with pandemic-era liabilities — particularly those that faced cash flow disruption and accumulated significant failure-to-pay penalties or interest.
Taxpayers under IRS collection activity — including payment plans, installment agreements, or audits initiated during the COVID emergency period.
Interest charged on penalties — if your underlying penalties were improperly assessed, associated interest charges may also be recoverable.
Does not apply to penalties previously waived via First Time Abatement or IRS COVID waivers, penalties unrelated to late filing or payment, or retirement account distribution penalties.

Eligibility depends on the type of charge, timing, and whether penalties were actually paid. WonderTrust will review your IRS transcripts to confirm what was assessed and paid during the relevant period.

Our Process

How WonderTrust helps you file

WonderTrust provides a structured, advisor-led process to assess your eligibility, prepare your claim, and file before the July 2026 deadline.

01
Assessment & Intake
Complete a short intake form covering your filing history, estimated penalties paid, and the tax years potentially affected. Takes approximately 5 minutes.
02
Transcript Review
WonderTrust pulls and analyzes your IRS account transcripts across the 2019–2022 tax years to identify penalties and interest assessed and paid during the COVID disaster window.
03
Advisor Consultation
A WonderTrust advisor reviews your transcript findings, quantifies potential refund exposure, and walks through the Form 843 filing process before the July 2026 deadline.
04
Protective Claim Preparation & Filing
WonderTrust assists in preparing Form 843 protective refund claims with proper citations to Kwong v. United States and Section 7508A(d), filed before the statute closes. We monitor IRS appeal developments and keep you informed.
What is a Protective Claim?

Why file now if the IRS is still appealing?

Because the IRS appeal does not extend the statute of limitations for taxpayers. If you wait for the appeal to resolve and the courts ultimately rule in taxpayers' favor, your deadline to claim will already have passed.

A protective claim (IRS Form 843) tells the IRS you are asserting your right to a refund while the legal issues are resolved. It is low-cost, preserves all your rights, and is the standard approach recommended by tax practitioners.

Form 843 — Key Facts
  • IRS Claim for Refund and Request for Abatement
  • One form required per tax year affected
  • Must cite Kwong v. United States and Section 7508A(d)
  • Must be filed by July 10, 2026
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Common Questions

Frequently asked questions

No. The 2022–2023 IRS COVID penalty waiver was a separate, broader administrative program where the IRS proactively issued refunds for certain penalties. This opportunity arises from a different source — a November 2025 court ruling that may entitle taxpayers to additional refunds beyond what that earlier program covered. If your penalties were previously waived, you may not have additional amounts to recover, but the two programs are distinct.
No. Unlike the earlier COVID waiver program, the IRS is not proactively reviewing accounts or issuing refunds under this ruling. Taxpayers must file Form 843 to assert their claim. The IRS is expected to appeal the ruling, which makes it even less likely that the agency will act without a formal claim on file.
The amount varies depending on how many tax years were affected (up to four: 2019–2022), the size of the penalties originally assessed, whether you have any outstanding IRS liabilities that could offset your refund, and whether you are an individual or business entity. Businesses with large pandemic-era tax liabilities generally have larger potential claims. WonderTrust will quantify your specific exposure as part of the transcript review process.
If the IRS appeal succeeds, your protective claim would not result in a refund. However, filing the protective claim costs very little and preserves your eligibility in the event that taxpayers ultimately prevail. The cost of inaction — permanently losing your claim — far outweighs the effort of filing. Most tax practitioners recommend filing regardless of appeal uncertainty.
Potentially more so than for individuals. Businesses that experienced cash flow disruption during the pandemic and accumulated failure-to-pay penalties or interest on large tax liabilities may have significantly larger claims than individual filers. Both sole proprietors and entity-level businesses (S-corps, LLCs, C-corps) may qualify.
WonderTrust is not a law firm and does not provide legal advice. We provide advisory and analysis services to help you understand your potential eligibility and assist in organizing documentation and claim preparation. For complex legal questions, we can connect you with qualified tax counsel.
Free Assessment

Find out if the IRS owes you money

Complete a short intake form. WonderTrust will review your IRS transcripts and assess whether COVID-era penalties or interest may be refundable — at no upfront cost.

Check My Eligibility Talk to an Advisor

WonderTrust is not a government agency and does not provide legal advice. Eligibility for IRS penalty refunds is subject to each taxpayer's unique facts and the outcome of pending appeals. July 10, 2026 deadline is based on current statute of limitations interpretation and may be subject to change.