Tax Refund Deadline Could Affect Tens of Millions by July 10, 2026
Tens of millions of taxpayers may need to file for a tax refund by July 10, 2026, to seek relief from IRS penalties and interest assessed during the COVID-19 federal disaster period. The Taxpayer Advocate Service says the relief will not happen automatically, so most people who want their money back must act.
The issue stems from recent court decisions, including Kwong v. United States, 179 Fed. Cl. 382, decided in November 2025. The Taxpayer Advocate Service says taxpayers may be entitled to a refund or reduction of assessed penalties and interest, and it expects the Department of Justice to appeal.
Kwong v. United States
The Kwong opinion said, “The plain meaning of that statute is that the automatic extension runs from the beginning of the disaster declaration, through the end of the declared disaster period, and until 60 days after the end of the declared disaster period.” The court’s reasoning treated filing and payment deadlines as postponed during the full COVID-19 federal disaster period, which ran from January 20, 2020, through May 11, 2023.
Sixty additional days pushed the tax timing window to July 10, 2023. Under that logic, returns and payments due during that span were not late until after July 10, 2023, and the IRS should not have assessed penalties for late filing or payment during that nearly 3.5-year period. The same reasoning also points to interest that should not have been charged on those amounts.
July 10, 2026 Deadline
The Taxpayer Advocate Service says most taxpayers must file a claim for refund by July 10, 2026, to protect their rights. The relief concerns penalties and interest assessed over a period in which tens of millions of taxpayers have been assessed penalties, so the filing deadline is the step that matters now for people who think they were charged under the broader reading of IRC § 7508A(d).
A narrower reading of the statute remains in play because the government’s pleadings disagreed that the law suspended filing and payment obligations for 3.5 years. Treas. Reg. § 301.7508A-1(f), Example 4, says a taxpayer already delinquent before January 20, 2020, does not receive a windfall elimination of pre-disaster penalties and interest, but the regulation would not control if a court accepts the broader statutory reading.
Taxpayer Advocate Service
For taxpayers who were assessed penalties or interest during the COVID-19 federal disaster period, the practical step is to consider whether a refund claim is due before July 10, 2026. The Taxpayer Advocate Service says some practitioners believe even pre-disaster liabilities may not have generated interest or penalties during the disaster period, while the Kwong opinion did not address those earlier delinquencies.
That leaves one immediate deadline and one unresolved path: file a claim by July 10, 2026 if you want to preserve the chance at relief, while the courts continue to test how far IRC § 7508A(d) reaches.
