Friday, July 10 is the last day for millions of American taxpayers to apply for potential COVID-related IRS refunds. Taxpayers who do not file with the IRS to protect a potential refund or exemption may lose their chance forever.
The potential tax refunds stem from a federal judge’s ruling in Kwong v. United States late last year, which suggested that federal tax filing and payment deadlines were automatically suspended during the federally declared COVID-19 disaster period from January 20, 2020, to May 11, 2023.
The government is appealing the decision, but if the decision is upheld, millions of taxpayers who paid or were charged late fees or interest during those 3.5 years could get a refund as everything was on hold.
The IRS quietly added a tool to its website to allow electronic filing of the forms required to claim a potential refund of fees paid from January 20, 2020, through May 11, 2023.
Millions of taxpayers may be entitled to a refund or waiver of penalties and interest that the IRS assessed during the nearly 3.5-year COVID-19 federal disaster period, but the only way to receive relief is to file a claim by July 10. If a claim is not filed, you will forever lose your chance to receive a potential refund or discount.
“Time is of the essence for people considering filing a claim,” said Glenn Frost, founding partner of Frost Law.
How do you know if you qualify and how to file?
Independent National Taxpayer Advocate (NTA) Erin Collins, as well as law firms and accountants, have published guidelines and steps for Americans to figure out.
Although most of the focus has been on potential refunds or exemptions, Collins said the court’s decision in Kwong v. United States could impact other tax-related deadlines. These also include whether certain taxpayers may still be eligible to claim tax refunds for prior years such as withholding, estimated tax payments, refundable credits, recovery rebate credits or other tax benefits for those years.
“This may include taxpayers who never filed an original return, as well as taxpayers who may benefit from filing an amended return to claim additional credits, deductions or payments,” he said.
Taxpayers must act quickly
Taxpayers who may be affected should now review their records and consider whether they need to file a refund claim, amended return, original return, exemption request or protective claim. With the July 10 deadline fast approaching, the fastest and safest way to get your claim in now is with the IRS’s electronic filing tool.
“A protective claim can preserve a taxpayer’s right to a refund while the law remains unsettled,” Collins said. “Filing a claim does not guarantee relief. But missing the deadline can permanently prevent taxpayers from receiving the refund they may ultimately be entitled to.”