IRS eases filing of protective COVID refund claims by July 10

The Internal Revenue Service has provided an electronic way to file a protective claim for a possible tax refund related to the COVID-19 pandemic ahead of a July 10 deadline that may depend on court rulings.

The IRS added Form 843, "Claim for Refund and Request for Abatement," to its Mobile Friendly Forms page last week just ahead of the deadline.

National Taxpayer Advocate Erin Collins has been encouraging taxpayers and their tax preparers in recent months to file protective claims for the refunds in the wake of a court decision last year that the IRS is now appealing. In Kwong v. United States, the Court of Federal Claims ruled last November in favor of a taxpayer who had argued that certain tax-related deadlines were postponed longer than the IRS had determined and published. The court interpreted Section 7508A(d) of the Internal Revenue Code as creating a mandatory disaster-related postponement period tied to the COVID-19 federal disaster declaration, which began on Jan. 20, 2020, and ended on May 11, 2023. Under that interpretation, certain tax-related deadlines may have been extended until 60 days after the end of the disaster incident period, which would have been July 10, 2023, giving taxpayers another three years to file protective claims for refunds or abatement. 

The IRS has disagreed and is appealing the court's decision in Kwong, but without any formal guidance to taxpayers, protective claims become the most effective recourse, according to the California Society of CPAs.

"Kwong does not guarantee a refund for every taxpayer that paid penalties or interest during the pandemic," said an email Wednesday from CalCPA. "It does, however, create a time-sensitive reason to review COVID-era IRS charges and preserve refund rights before the statute of limitations closes. For many taxpayers, a protective claim may be the best way to keep the door open while the ruling continues to develop.  Taxpayers should review their IRS accounts, identify any potential refund opportunities, and consider filing a protective claim by July 10, 2026."