Tens of millions of taxpayers who paid penalties or missed refunds during the COVID-19 pandemic have until July 10, 2026 to file a protective refund claim, according to the National Taxpayer Advocate. The deadline traces back to a court ruling that found the IRS had been shortchanging the disaster-relief postponement period Congress built into the tax code — and the fix now comes with its own expiration date.
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What happened
The U.S. Court of Federal Claims, in Kwong v. United States, held that the COVID-19 federal disaster postponement period under IRC §7508A(d) actually extended filing and payment deadlines through July 10, 2023 — three years later than the IRS had originally calculated. The Tax Court’s Abdo v. Commissioner decision reinforced the same reading.
That matters now because standard refund-claim statutes of limitation run three years from a return’s (corrected) due date. For the window running from January 20, 2020 through July 10, 2023, that three-year clock expires on July 10, 2026 — this Friday.
The Taxpayer Advocate Service says the affected group includes taxpayers who were assessed failure-to-file penalties, failure-to-pay penalties, estimated-tax penalties, and related interest during that period because the IRS’s shorter postponement calculation understated the relief they were owed. It also covers taxpayers who filed late international information returns, or who may be due refunds, refundable credits, or withholding for tax years 2019 through 2022.
Why it matters
No dollar figure has been attached to the total relief at stake — this isn’t a lump-sum stimulus-style payment, it’s penalty and interest abatement calculated per taxpayer, plus recovery of refunds that would otherwise lapse. The Taxpayer Advocate Service is blunt about the stakes of missing it: “Filing a protective claim can preserve a taxpayer’s right to a refund while the law remains unsettled,” while missing the deadline “may permanently prevent taxpayers from receiving a refund to which they may ultimately be entitled.”
The underlying legal question — exactly how far the COVID postponement period extends — is still being litigated. Filing now doesn’t require the law to be settled; it just preserves your place in line if it eventually resolves in your favor.
What this means for small business owners
If your business had any penalty assessments, late filings, or open refund questions tied to tax years 2019 through 2022, this is worth a same-week look, not a someday task. The claim vehicle is Form 843 (Claim for Refund and Request for Abatement) — eligible individual filers can submit electronically through IRS.gov, or mail it to the IRS at 1973 N Rulon White Blvd., Ogden, UT 84201. A protective claim should cite IRC §7508A(d) and Kwong v. United States directly.
For business owners without in-house tax counsel, this is exactly the kind of deadline that slips through the cracks between a bookkeeper who tracks day-to-day transactions and a CPA who’s only engaged at filing season. If you had any COVID-era penalty notices sitting in a drawer, now is the time to pull them back out.
“Filing a protective claim can preserve a taxpayer’s right to a refund while the law remains unsettled.” — Taxpayer Advocate Service
The bottom line
July 10, 2026 is a hard cutoff for a refund window most taxpayers didn’t know existed until a court case forced the IRS’s hand. Whether or not the broader legal fight over the postponement period resolves in taxpayers’ favor, filing a protective claim now costs little and preserves the option to collect later. If any part of your 2019–2022 tax history touches penalties, late international filings, or an open refund question, get it in front of your tax preparer before the deadline passes.
Sources: Taxpayer Advocate Service, Ballard Spahr
