IRS Refund Deadline Approaches: Taxpayers Should Consider Filing Protective Claims Before July 10, 2026

A recent Court of Federal Claims decision may entitle taxpayers to refunds of interest and penalties paid on federal tax obligations that came due during the COVID-19 disaster period. The IRS refund deadline tied to that ruling is July 10, 2026, and eligible taxpayers should consider filing a protective claim before it expires.

On March 13, 2020, President Trump declared the COVID-19 pandemic a disaster for all U.S. states and territories. President Biden ended the disaster declaration on May 11, 2023. Under the law in effect at that time, certain federal filing and payment obligations are postponed for the length of a declared disaster, plus 60 days. Those postponed obligations include IRS deadlines, and the consequences of that suspension are now the subject of active litigation.

The Kwong Decision and the COVID-19 Disaster Period

In 2025, the U.S. Court of Federal Claims issued its decision in Kwong v. United States, holding that the COVID-19 federal disaster period suspended most federal tax filing and payment deadlines from January 20, 2020 through May 11, 2023, plus 60 days, ending on July 10, 2023. Under the court’s reasoning, returns and payments that came due during the disaster period were not late, so long as they were filed and paid on or before July 10, 2023. If they were not late, interest and penalties do not attach.

The IRS disagrees with the decision and is expected to appeal it. Until the appeal is resolved, however, taxpayers who paid interest or penalties on pandemic-era obligations may have a basis to seek a refund.

The IRS Refund Deadline: July 10, 2026

Under federal tax law, a claim for refund must be filed within the later of three years from the date the return was filed or two years from the date the tax was paid. Applying the three-year rule to the end of the disaster period, the latest date a pandemic-era refund claim can be filed is July 10, 2026. Taxpayers who do not file by that date will lose the right to recover, regardless of how the appeal in Kwong is ultimately decided.

Who May Be Affected

Individuals, businesses, estates, and trusts should review their position if they fall into any of the following categories:

• Taxpayers currently in examination, in appeals, or before the United States Tax Court for any pandemic return year (2019 through 2022) in which the IRS has proposed a tax deficiency that would accrue interest during the January 20, 2020 through July 10, 2023 disaster period.
• Taxpayers who have been assessed a tax deficiency, including penalties and interest, for a period within the disaster window but have not yet paid it.
• Taxpayers who have recently settled a United States Tax Court case for a pandemic return year (2019 through 2022).
• Taxpayers who have paid deficiencies, interest, or penalties relating to a pandemic return year (2019 through 2022), or to any other period in which interest or penalties accrued during the disaster period (January 20, 2020 through July 10, 2023).
• Taxpayers who made installment agreement payments during the January 20, 2020 through July 10, 2023 disaster period.

How to File a Protective Refund Claim

Taxpayers who believe they may be entitled to a refund should file a protective refund claim on IRS Form 843 and write “Protective Refund Claim Pursuant to Kwong Case” on the form. A protective claim does not guarantee a refund. The Kwong case is moving through the appeals process and could be overturned. But if a protective claim is not filed by July 10, 2026, the taxpayer is guaranteed not to receive a refund, because the time allowed to submit the claim will have passed.

Do not delay. Taxpayers who believe they may be affected should consult their accountant or a qualified tax controversy attorney to determine whether a protective claim should be filed.

Help Meeting the IRS Refund Deadline

If you have questions about the IRS refund deadline or need assistance evaluating whether to file a protective refund claim, please contact Scott H. Novak or any member of our Tax, Trusts & Estates team.