The IRS Might Owe You a Refund From a Pandemic-Era Tax Loophole
Believe it or not, the IRS may have accidentally spawned a refund side quest. A federal court ruling found taxpayers shouldn’t have been charged certain interest and penalties between Jan. 20, 2020, and Jul. 10, 2023, because COVID-19 triggered extended tax deadlines under federal law. Thanks to this, millions of Americans could collectively be owed billions in refunds.
- Eligible refunds include underpayment interest, audit deficiencies, failure-to-file penalties, and late international filing fees.
- Claims must be filed by Jul. 10, 2026, using a mailed paper Form 843, as no electronic filing portal currently exists.
The claims process: The process starts by reviewing 2019–2022 IRS transcripts to identify qualifying charges and transaction codes tied to the ruling. Some exclusions still apply, including certain large understatement penalties, so more complicated cases may require professional tax help. Some taxpayers who skipped filings during that period could also still qualify for reduced penalties. Refunds may take a while due to IRS staffing cuts, so patience is part of the deal.