If you had to pay fees for filing your taxes late during the COVID-19 federal disaster period, you may be entitled to a refund or penalty abatement.
Recently, a federal court ruled that the government should not have assessed penalties for late filings or charged interest on late payments, the “Today” show reported.
The IRS’s Taxpayer Advocate blog explained, “For COVID-19, a federal disaster declaration was in effect from January 20, 2020, through May 11, 2023. Sixty additional days extended the period to July 10, 2023, for tax purposes. Based on the court’s reasoning inKwong, filing and payment deadlines were postponed during that entire period, and as a result, tax returns and payments due anytime within that window were not late until after July 10, 2023. By the court’s logic, the IRS should not have assessed penalties for late filing or payment during that 3.5-year period, nor charged interest on those amounts."
If a taxpayer meets one of the following three criteria, the website says they may get a refund or abatement:
- “Penalties for failure to timely file returns, failure to pay taxes, or failure to make estimated tax payments.”
- “Interest that began accruing earlier than it should have, or not at all.”
- “Overpayment interest for the 2020–2023 disaster period.”
Tens of millions of taxpayers may qualify.
But they may not know it, USA Today reported.
“Many taxpayers affected by this issue have low and moderate incomes,” the blog said. “These taxpayers are less likely to have professional representation and to learn about complex legal developments like this one. As a result, they face a greater risk of missing the opportunity to claim refunds to which they may be entitled.”
Individuals, small businesses, large corporations, estates and trusts may be eligible, the organization said, according to USA Today.
But you will have to file a claim using Form 843 to see your money.
It must be sent by July 10.
The IRS suggests writing “Protective Refund Claim Pursuant to Kwong Case” or similar at the top of the form and providing as much detail as possible, the “Today” show reported.
The statement will protect the rights of a taxpayer once the final legal determination is made after the standard claim filing expires, the IRS explained.
“Typically, the IRS holds protective claims for refunds in suspense until the underlying issue is resolved by the courts, and the claim can be perfected by providing the final numbers based upon the court’s decision. Protective claims prevent the period of limitations from expiring while waiting for a final resolution. Unfortunately, the resolution may take years,” the IRS said in its blog.
You can ask for the refund of the amount you have paid or an abatement, meaning a reduction or elimination of what you were told you owe.
Keep in mind that the form cannot be submitted electronically. It must be on paper and mailed. The IRS suggests sending it by certified mail to prove when it was sent.
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