If you paid penalties or interest to the IRS on a return filed between January 20, 2020 and May 11, 2023, you may be owed money back — and the window to claim it closes on July 10, 2026. After that date, the refund opportunity is gone permanently.

A recent court ruling determined that the IRS should not have assessed late-filing penalties or interest during the federally declared COVID-19 disaster period. The ruling applies broadly: gig workers, freelancers, sole proprietors, and individuals who filed late, paid under-estimated taxes, or were denied penalty abatement during those years may all have a valid claim.

Are you eligible?

You likely qualify if any of the following apply to you:

You filed a return late between 2020 and 2023 and were charged a failure-to-file or failure-to-pay penalty
You paid interest to the IRS on a balance due during that period
You were charged an estimated-tax penalty for tax years 2019, 2020, 2021, or 2022
You requested penalty abatement and were denied during that window
You amended a prior-year return and were assessed penalties or interest as a result
You received any IRS penalty notice tied to the 2019, 2020, 2021, or 2022 tax years

If you're not sure whether you paid penalties or interest, check your IRS account transcript at irs.gov/individuals/get-transcript. It will show every payment, penalty assessment, and interest charge on your account by year.

Is the refund worth pursuing?

For most people in these situations, yes. Penalties and interest compound quickly on meaningful balances:

If your total tax due exceeded $3,250 in any single year during 2020–2023, the associated penalties and interest alone can be substantial
If your total tax due across all four years exceeded $13,000 combined, this claim is almost certainly worth filing

Failure-to-file penalties run at 5% of unpaid tax per month, up to 25%. Failure-to-pay penalties run at 0.5% per month. Interest accrues on top of both. On a $5,000 balance that sat unpaid for 18 months, the combined penalties and interest can easily reach $1,000 or more — all potentially refundable.

How to file: Form 843

The claim is filed using IRS Form 843 (Claim for Refund and Request for Abatement). A few important logistics:

File on paper only. Form 843 cannot be filed electronically. It must be mailed to the IRS Service Center where your original return was processed.
One form per tax year. If you're claiming refunds across multiple years (for example, 2020 and 2021), you need a separate Form 843 for each year.
Include documentation. Attach copies of the IRS notices showing the penalties or interest charged, and any prior correspondence if you previously requested abatement and were denied.
Reference the COVID disaster period in your explanation. On line 7 (Explanation), state that the penalty or interest was assessed during the federally declared COVID-19 disaster period and cite the applicable court ruling. Your CPA can draft this language precisely.

If you're filing for multiple years, mail each Form 843 in the same envelope or in separate mailings clearly labeled by tax year. Keep copies of everything you mail, along with your postmark receipt.

The deadline is firm: July 10, 2026

This is not a soft deadline. Refund claims for penalties and interest generally must be filed within three years of paying the tax, or two years of paying the penalty — whichever is later. The July 10, 2026 date represents the outer edge of that window for the COVID period. Claims filed after that date will almost certainly be rejected as untimely, with no further recourse.

If you think you might qualify, don't wait until late June. The IRS takes time to process paper forms. Filing in May or early June gives you time to address any issues the IRS raises before the window closes.

What about automatic penalty relief?

The IRS previously issued Notice 2022-36, which provided automatic penalty relief for late-filed returns for tax years 2019 and 2020. If you benefited from that relief, you may still have a separate claim for interest charged during the disaster period that was not covered by the automatic waiver. The two claims are distinct. Check your transcript carefully to see which penalties were already abated and which were not.

Action steps to take now

Pull your IRS account transcripts for tax years 2019 through 2022 at irs.gov/get-transcript
Identify any penalty or interest charges assessed during the COVID period
Gather copies of IRS notices and any prior abatement requests
Contact your CPA to prepare and mail Form 843 (one per tax year) well before July 10, 2026

Contact your CPA for more information. This is a time-sensitive situation and your tax professional can confirm your eligibility, calculate your potential refund, and prepare the correct documentation to give your claim the best chance of approval.

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