The IRS May Owe Millions A Pandemic Tax Refund

A recent court ruling may make millions of Americans eligible for a COVID-19 tax refund, The New York Post reports. 

In November 2025, a U.S. Court of Federal Claims argued in Kwong v. United States that federal tax deadlines should have been postponed for the entire pandemic, going from Jan. 20, 2020, through May 11, 2023, plus an additional 60 days, as tax code Section 7508A(d) outlines a requirement for tax deadlines to be postponed during disaster that are federally declared. 

In layman’s terms, the deadline for tax filings from 2019 to 2022 should have been extended through July 10, 2023, meaning anyone who filed prior to the date and was charged a late penalty or fined could be eligible for a refund. 

Tax experts are encouraging filers to make a claim soon. Since taxpayers have limited time to file for a potential refund or penalty reduction by law, the IRS will more than likely appeal the ruling.

“Millions of taxpayers could be eligible, but if people don’t file claims before July 10, 2026, they lose out on the potential for a refund or abatement,” Jon Wasser, a partner at Fox Rothschild with a tax issue focus, said, according to USA Today.

Pandemic refund claims have already been successful in court. Digital storage solutions firm, Western Digital, pushed a lawsuit against the federal government in February 2025 for a  partial refund of the $53.6 million tax payment submitted in August 2023. They argued the company should have never been charged close to $21 million in interest since the filings were submitted during the disaster period. 

The suit supports sentiments from Jessica Marine, a partner at Frost Law, who curated a blog post about the cash some refund recipients could see. “The potential dollar amounts could be significant, particularly for businesses that faced liquidity challenges during the pandemic and incurred substantial failure-to-pay (taxes) penalties,” Marine wrote. 

With the refund statute of limitations generally ranging between three years from the time the return was filed or two years from the time the tax was paid, here’s how you can see if you qualify for a refund. Since the ruling suggested tax deadlines were moved to July 10, 2023, Wasser said the last date to preserve your claim for a potential refund would be July 10, 2026—three years to the date. 

He also recommends taxpayers check their tax records to see if the IRS levied penalties or interest during the tax filing pause since that is something the agency can do by either asking their tax professionals or looking at their IRS tax transcript.

To gain access to their tax transcripts, filers can visit the IRS website, request a mail copy on the website, or call the agency’s phone service at 800-908-9946.

Tax professionals or average taxpayers can file claims by using IRS Form 843, claim for refund and request for reduction, using information from the tax transcript. Specify it’s a protective claim based on the Kwong v. United States decision surrounding Section 7508A(d) and the COVID-19 disaster period. 

“You’re basically telling the IRS, ‘here’s a refund claim, put it on hold for now’ until the case has a final determination.” Wasser said. Amid all litigation is final and it is ruled the IRS must issue refunds, your right to claim a refund is preserved.

“You just need to put the IRS on notice now,” Wasser added.

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