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IRS Penalty & Interest Refunds After COVID: Claim Before July 10, 2026
- Rona Law Firm
- 2 days ago
- 3 min read
If you paid IRS penalties or interest during COVID, you may be entitled to an IRS penalty refund. Recent court rulings confirmed that many of these charges should not have been applied, and taxpayers now have a limited window to recover that money.
From January 20, 2020 through July 10, 2023, the IRS was required to suspend certain penalties and interest under federal law. However, many taxpayers were still charged and paid these amounts.
As a result, you may have overpaid and you may be eligible for a refund.
What Changed Under COVID Tax Relief Laws?
During the COVID-19 pandemic, the federal government enacted relief measures under Internal Revenue Code § 7508A(d). This provision required the IRS to pause the accrual of penalties and interest during a federally declared disaster period.
The key takeaway: Penalties and interest should have been suspended from January 20, 2020 through July 10, 2023. Despite this requirement, many IRS accounts continued to accrue charges — and taxpayers paid them without realizing they may not have been legally owed.
Who Qualifies for an IRS Penalty or Interest Refund?
You may qualify for an IRS interest refund or penalty refund if you:
Paid IRS penalties or interest between 2020 and 2023
Were on an installment agreement during that time
Had wage garnishments or bank levies
Paid off a tax balance that included penalties or interest
Operate a business that paid payroll or other tax penalties
Even if your tax issue has already been resolved, you may still be eligible to file a claim.
Key Cases: Kwong v. United States and Abdo v. Commissioner
Two important court decisions clarified the IRS’s obligation during the COVID period:
Kwong v. United States
Abdo v. Commissioner
These rulings confirmed that the IRS was required to suspend penalties and interest under IRC § 7508A(d). This has opened the door for taxpayers to seek refunds for amounts that were improperly charged and collected.
What Is IRC § 7508A(d) and Why It Matters
IRC § 7508A(d) allows the federal government to provide tax relief during federally declared disasters.
During COVID-19, this law required the IRS to:
Suspend penalties
Suspend interest
Provide relief to affected taxpayers
This is the legal foundation behind current IRS overpayment refund claims related to COVID.
How to Claim an IRS Refund for Penalties and Interest
To recover overpaid penalties or interest, taxpayers must file a formal claim with the IRS.
The process typically includes:
Reviewing IRS account transcripts
Identifying penalties and interest charged during the COVID period
Calculating the correct amount that should have been suspended
Filing a refund claim with supporting documentation
This process can be complex, and errors can delay or prevent your refund.
👉 You can check if you qualify here: www.ronalawfirm.com
IRS Refund Deadline: July 10, 2026
There is a strict deadline to file your claim.
👉 Most taxpayers must submit refund claims by July 10, 2026.
If you miss this deadline, you may permanently lose your ability to recover these funds.
Because IRS processing times can be slow, it is important to act well before the deadline.
Should You File a Claim Now?
If you paid IRS penalties or interest during the COVID period, it is worth reviewing your account. Many taxpayers assume their balance was correct, but recent developments suggest that may not be the case. Even small penalties and interest can add up to significant refunds.
Get Help Filing Your IRS Refund Claim
At Rona Law Firm, we help taxpayers:
Identify IRS overpayments
Calculate refund amounts
Prepare and file refund claims
Communicate with the IRS on your behalf
If you’re unsure whether you qualify, we can review your account and guide you through the process.
📞 Or call us today to speak with a tax attorney at 818.964.1829.
Frequently Asked Questions About IRS Penalty Refunds
Can I get IRS penalties refunded?
Yes, if they were improperly charged during the COVID relief period, you may be eligible for a refund.
Does the IRS automatically issue refunds?
No. You must file a claim to recover overpaid penalties or interest.
What happens if I miss the July 10, 2026 deadline?
You may lose your right to claim the refund permanently.
You can check if you qualify for an IRS penalty refund here or call us at 818.964.1829.
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