Tens of millions of taxpayers hit with IRS penalties or late fees may be eligible for a refund, thanks to a recent federal court ruling. But the time to act is quickly drawing to a close.
In November 2025, the U.S. Court of Federal Claims ruled in Kwong v. United States that certain tax deadlines should have been paused during the federally declared Covid-19 disaster period, as well as a statutorily mandated 60-day extension.
“By the court’s logic, the IRS should not have assessed penalties for late filing or payment during that 3.5-year period [between Jan. 20, 2020, and July 10, 2023], nor charged interest on those amounts,” National Taxpayer Advocate Erin M. Collins wrote in an April 30 blog post.
Because taxpayers generally have three…