Tens of Millions Face July 10 Internal Revenue Service Refund Claim Deadline
Tens of millions of taxpayers may be able to seek refunds or abatements of internal revenue service penalties and interest tied to the COVID-19 federal disaster period. Most must file a claim by July 10, 2026, because the relief will not happen automatically.
The filing window comes from court reasoning in Kwong v. United States, 179 Fed. Cl. 382, decided in November 2025. The opinion reads IRC § 7508A(d) to postpone filing and payment deadlines for the full disaster period and 60 additional days, which the court said ran through July 10, 2023.
Kwong v. United States
Kwong v. United States, 179 Fed. Cl. 382, turned on the automatic postponement language in IRC § 7508A(d). The court said the statute, as it existed when the COVID-19 federal disaster was declared, extended deadlines from January 20, 2020, through May 11, 2023, plus 60 days.
Under that reasoning, returns and payments due during that span were not late until after July 10, 2023. The same logic led the court to say the IRS should not have assessed penalties for late filing or payment during that nearly 3.5-year COVID-19 federal disaster period, and should not have charged interest on those amounts.
July 10, 2026 deadline
The practical step for taxpayers is filing a refund claim by July 10, 2026 if they want to protect their rights. The relief is not automatic, and the issue is not limited to a small or specialized group; tens of millions of taxpayers have been assessed penalties.
The government’s pleadings took a narrower view of the postponement statute and disagreed that it suspended filing and payment obligations for 3.5 years. The Department of Justice may appeal the decision, which could leave the dispute unresolved for years if that happens.
Pre-disaster liabilities
A separate dispute runs through the case law and practitioner debates: whether taxpayers already delinquent before January 20, 2020 can seek relief from interest or penalties that kept accruing during the disaster period. Some practitioners believe they may, but the IRS disagrees.
Example 4 in Treas. Reg. § 301.7508A-1(f) says a taxpayer already delinquent before January 20, 2020 does not receive a windfall elimination of pre-disaster penalties and interest. The Kwong opinion did not address pre-disaster delinquencies, so taxpayers with older liabilities will need to watch how the statutory reading and the regulation interact if the dispute continues.
