Tens Of Millions Of Taxpayers May Be Owed IRS Refunds From Pandemic Era: Watchdog

Authored by Jack Phillips via The Epoch Times (emphasis ours),

The IRS’s internal watchdog has stated that tens of millions of U.S. taxpayers may be owed refunds or abatements of penalties or interest during the COVID-19 federal disaster period.

“The bottom line: You may be entitled to a refund or reduction of assessed penalties and interest,” the National Taxpayer Advocate (NTA) stated in a notice published on April 30 and updated on May 1. “For taxpayers dealing with financial pressures, these amounts can make a real difference. But most taxpayers must act by July 10, 2026, to request their potential refunds.”

The NTA stated that the refunds or payments had arisen from multiple court decisions, including one handed down in November 2025 that “provides for the automatic postponement of filing and payment deadlines during the period a federal disaster declaration is in effect, plus 60 days” during the COVID-19 federal disaster period, which lasted more than three years.

The declaration for COVID-19 was in effect from Jan. 20, 2020, through May 11, 2023, it noted. Another 60 days extended that period to July 10, 2023, for tax-related purposes.

“Based on the court’s reasoning … filing and payment deadlines were postponed during that entire period, and as a result, tax returns and payments due anytime within that window were not late until after July 10, 2023,” the NTA stated. “By the court’s logic, the IRS should not have assessed penalties for late filing or payment during that 3.5-year period, nor charged interest on those amounts.”

Taxpayers may be able to receive an abatement or refund for certain amounts during that federal disaster period, the NTA stated, such as for failure to pay taxes, failure to make estimated tax payments, or penalties that were incurred for not filing timely tax returns.

Taxpayers may also be able to receive refunds on interest that started accruing earlier than it should have or that should not have accrued at all or overpayment for interest in the 2020–2023 COVID-19 disaster period, it stated.

“This issue is widespread and not limited to a small or specialized group of taxpayers,” the NTA stated. “As noted, tens of millions of taxpayers have been assessed penalties or interest for late filings or payments during these years.”

The IRS, in most cases, will not issue refunds or abatements unless a taxpayer files a claim, it warned, noting that a taxpayer likely will have to file a claim within three years of the date they filed a tax return or two years from the date when they paid their tax.

As a result, most taxpayers who are affected would need to file claims by July 10 and will have to use Form 843, titled, “Claim for Refund and Request for Abatement.” Some taxpayers may “consider filing protective claims to preserve their rights,” the watchdog stated, citing the fact that the cases are still being litigated.

The NTA, which warned that Form 843 must be completed on paper and cannot be done electronically, also suggested that taxpayers contact a tax professional to claim the refund or abatement. It further suggested that members of Congress should highlight the coming deadline and that tax professionals keep their clients informed about the rebate.