Millions of Americans may be entitled to a COVID-related IRS refund following penalties and interest that were potentially improperly assessed during the federal disaster period. With the July 10, 2026, deadline fast approaching, taxpayers need to act quickly to avoid losing the chance to claim these refunds.
IRS Refund Rules and Court Ruling
The refund opportunity stems from the court case Kwong v. United States, decided last November. The court found that certain penalties and interest applied during the nearly three-and-a-half-year COVID-19 federal disaster period could have been improperly assessed. While the government has appealed the decision, taxpayers do not have the luxury of waiting for the appeal to conclude.
Filing a claim by July 10, 2026, is essential, as missing the deadline will permanently forfeit the refund or abatement rights.
Complexities of Filing and Available Tools
Navigating IRS rules for COVID-related refunds is complex. Determining eligibility, calculating amounts, and filing properly requires careful attention. Independent National Taxpayer Advocate Erin Collins and various law firms and accountants have published guidance. Tools like those from Frost Law and CovidTaxRefunds.com simplify the process, allowing taxpayers to check eligibility and submit claims efficiently.
Glen Frost, founding partner of Frost Law, emphasizes urgency, warning that July 10 is only a month away. He notes that retrieving IRS tax data for evaluation can take up to a week, so starting early is critical. Using these tools, taxpayers only need to verify their identity and sign an IRS form to allow professionals to review their IRS transcripts and determine eligibility and potential refund amounts.
Frost’s tool is free to check eligibility, but fees may apply if the taxpayer chooses to file the claim through the firm.
Who Could Qualify for a Refund
Eligibility for COVID-related IRS refunds is broad. Collins explained that individuals, small businesses, large corporations, estates, and trusts could all qualify. The refund could affect taxpayers with obligations relating to income, employment, estate, gift, and excise taxes. Those who filed late international information returns may also benefit, as penalties in these cases can be substantial even when no tax was due.
With tens of millions potentially affected, now is the time to verify whether you qualify. The IRS refund process may seem daunting, but available tools make it easier for taxpayers to secure the money they may be owed.
