If the IRS charged you a penalty or interest between 2020 and 2023, there's a real chance you may be owed some of that money back — and most people who paid have no idea. Two federal court decisions found the IRS applied its COVID-era penalty relief far too narrowly. The catch: the window to protect your claim closes July 10, 2026. Here's what changed, who it may help, and exactly how we handle it.
What the courts actually found
In Kwong v. United States and Abdo v. Commissioner, the courts held that the 2019 version of the COVID-19 disaster-relief statute made the deadline postponement mandatory — and rejected the IRS regulation that tried to cap it at one year. The practical result: the COVID disaster period is treated as running the entire stretch from January 20, 2020 through July 11, 2023. Penalties and interest the IRS assessed or collected inside that window may be refundable or abatable.
Important — this is not settled law. These decisions are favorable, but they are not final, they will likely be appealed, and the IRS will contest refunds. No one can promise you a check. What you can do right now is preserve your right to one — which is exactly what a protective claim does.
What a "protective claim" is — and why the date matters
A protective refund claim is a filing that freezes the statute of limitations on a refund while an unresolved question — here, the Kwong appeals — plays out. It holds your place in line, and it does not require you to know the exact dollar amount yet. But it has a hard deadline: to cover the COVID-window years, the claim generally must be filed by July 10, 2026. Miss that date and the refund is permanently lost — even if the courts ultimately side with taxpayers.
Who may qualify
It's broad. You may be eligible if the IRS assessed — or you paid — any of the following inside the window, across personal, business, payroll, or estate filings:
- Failure-to-file and failure-to-pay penalties
- Payroll tax deposit penalties (Forms 941/940)
- Estimated-tax penalties
- Accuracy-related penalties
- The interest charged on those balances
Both buckets count: penalties and interest you already paid (a possible refund) and amounts assessed but still owed (a possible abatement). Nothing is certain until your transcripts are pulled — which is the first thing we do.
How we handle it — start to finish
You don't need to understand the tax code or pull a single transcript. Here's the process we run for you:
STEP 1We research your account
With your authorization, we pull your IRS account transcripts for every claim year, flag each penalty and interest line dated inside the window, confirm the trigger date qualifies, and separate what you already paid (a possible refund) from what's still owed (a possible abatement).
STEP 2We file the protective claim
We prepare one protective claim (Form 843) per qualifying year, citing Kwong and Abdo. You sign it; we mail it certified, return-receipt, before July 10, 2026 — locking in your statute of limitations.
STEP 3We handle the IRS — for as long as it takes
The IRS holds protective claims while the litigation is on appeal, which can take years. We monitor the case, respond to the IRS, and supplement your claim with exact figures — so if taxpayers ultimately prevail, you're positioned to collect.
The deadline doesn't move. A protective claim is a low-cost way to keep a potentially valuable refund alive while the courts sort out the law — but only if it's filed in time.
You may be owed money back. Let's find out before the window closes.
As Federally-Authorized Tax Practitioners, we do the research, file the protective claim, and handle the IRS so you don't have to. The review is free — and the clock is the only thing we can't control.