Updated: July 8, 2026
A fast-approaching July 10, 2026 deadline could affect taxpayers who were charged certain IRS penalties or interest during the COVID-19 disaster period. The IRS has not created an automatic refund program, and refunds are not guaranteed. However, the National Taxpayer Advocate is urging potentially affected taxpayers to file a claim before the deadline to protect their rights while the Kwong v. United States case continues.
The case focuses on whether many federal tax deadlines should have been postponed during the national COVID-19 emergency. If the taxpayer-favorable ruling is upheld, some late-filing penalties, late-payment penalties, estimated tax penalties, interest charges, and related amounts may be eligible for refund or abatement.
Why July 10, 2026 Matters
For many taxpayers, July 10, 2026 is being treated as the key deadline to file a formal or protective refund claim. A protective claim does not mean the IRS will send money right away. It simply keeps the claim open while the legal dispute is unresolved.
The risk is timing. If a taxpayer waits until the appeal is finished, the normal refund claim period may already be closed. That could prevent recovery even if the courts later agree that penalties or interest were improperly charged.
What the Kwong Case Is About
Kwong v. United States involves Internal Revenue Code Section 7508A(d), a disaster-relief rule tied to federal tax deadlines. The U.S. Court of Federal Claims concluded that certain tax-related deadlines may have been suspended during the COVID-19 federal disaster period from January 20, 2020, through July 10, 2023.
The federal government has appealed the decision. That means the outcome can still change, and taxpayers should not assume that every penalty or interest charge will qualify.
Latest IRS Filing Update
The IRS has now added specific guidance for taxpayers filing Form 843 claims that cite Kwong. Certain individual taxpayers can file electronically through an IRS Online Account. Business taxpayers, and individuals who do not use the online option, should still file a completed paper form with the IRS.
The IRS guidance for Form 843 claims citing Kwong v. United States explains the latest filing options.
Who Should Review Their Records?
The issue may affect more than individual income tax filers. Depending on the facts, potential claims could involve:
- Individuals who filed or paid late during the COVID disaster period
- Small businesses
- Corporations
- Partnerships
- Trusts and estates
- Tax-exempt organizations
- Taxpayers with late international information returns
The National Taxpayer Advocate says relief is not automatic. Taxpayers generally need to file a claim by the deadline to protect any possible refund or abatement rights.
How a Protective Claim Works
Many taxpayers are expected to use IRS Form 843, Claim for Refund and Request for Abatement. The form is commonly used to request a refund or removal of certain penalties, interest, fees, and additions to tax.
A protective claim should clearly identify the tax period involved, the type of penalty or interest being challenged, and the connection to Kwong v. United States. Taxpayers with several years or tax periods may need separate filings.
The National Taxpayer Advocate’s July 2026 guidance explains why taxpayers may need to act before the deadline even though the appeal is still pending.
Why IRS Transcripts Matter
Before filing, taxpayers should review IRS account transcripts and payment records. These records can show whether penalties, interest, or related charges were assessed during the COVID disaster period.
This step is important because not every taxpayer will have the same claim. Some may have paid penalties already. Others may still owe assessed penalties. Some may need an abatement request rather than a refund request.
Practical Filing Risks
The deadline leaves little room for mistakes. Paper forms can take time to prepare and mail, and taxpayers should keep proof of timely filing. Those using a tax professional should allow time to review account transcripts, payment dates, penalty codes, and prior IRS notices.
Taxpayers waiting for a normal federal refund can review the IRS refund processing timeline to understand how regular refund timing works separately from protective Kwong claims.
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What Has Not Been Decided Yet
The IRS has not accepted the lower court ruling as final policy. The appeal could limit, expand, or reverse the refund opportunity. That is why the current focus is not on guaranteed payments, but on preserving the right to make a claim if the final result supports taxpayers.
The safest next step for affected taxpayers is to review records before July 10, 2026 and decide whether a formal or protective claim is needed. Because the rules are technical and the facts vary by taxpayer, professional advice may be important before filing.
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