dailyloe.com – Tens of millions of Americans might be eligible for IRS refunds from the COVID-19 era. The National Taxpayer Advocate (NTA) is warning taxpayers that the deadline to claim these refunds is approaching rapidly. Taxpayers affected often have low and moderate incomes and lack professional representation to navigate these developments.
The potential refunds arise from a court ruling in Kwong vs. United States. This ruling interprets a tax rule stating that federally declared disasters extend tax deadlines for an additional 60 days. The COVID-19 public health emergency, declared from January 20, 2020, to May 11, 2023, falls under this provision.
With the new tax deadline set for July 10, 2023, taxpayers must file for tax years 2019, 2020, 2021, and 2022. The IRS likely could not levy penalties or interests during this period. Therefore, taxpayers who received penalties or fees may be owed a refund.
The IRS disagrees with the court ruling, and the Department of Justice is expected to appeal. Nonetheless, taxpayers need to file claims to preserve their potential refunds. The NTA emphasizes the importance of these amounts for taxpayers facing financial pressures.
Taxpayers need to act by July 10, 2026, to request these refunds. The amounts owed may include penalties for late filing, unpaid taxes, and estimated tax payments. Additionally, interest that accrued incorrectly during the disaster period could also be claimed.
Some tax practitioners believe that interest or penalties from liabilities incurred before the disaster period may still be claimable. However, this remains a point of contention with the IRS. Taxpayers may have to wait for a final resolution regarding these claims.
