IRS Opens Online Filing for Pandemic Penalty Refunds Ahead of Friday Deadline

WASHINGTON — The Internal Revenue Service last week launched a new online portal for individual taxpayers to file for refunds related to a key court decision on pandemic-era penalties and interest, providing an electronic option just days before a critical July 10 deadline.

The new tool allows individuals to electronically submit Form 843, Claim for Refund and Request for Abatement, for protective claims tied to the 2025 Kwong v. United States case. The move comes as millions of taxpayers who paid certain penalties during the COVID-19 disaster period face a rapidly closing window to preserve their rights to a potential refund while the case is under appeal by the government.

The underlying issue stems from a decision by the U.S. Court of Federal Claims in Kwong, which held that the COVID-19 disaster declaration automatically extended the statutory deadlines for filing refund claims. According to the court's reasoning, Section 7508A(d) of the tax code allows for the disregard of certain time-sensitive acts during a federally declared disaster. This interpretation applies to the period from January 20, 2020, through July 10, 2023.

If the court's decision is ultimately upheld, it could effectively extend the statute of limitations for taxpayers to claim refunds for penalties and interest paid in relation to those years. This could result in significant refunds for a large number of individuals and businesses that were assessed and paid these amounts.

However, the IRS has appealed the decision and has until July 20 to file its brief. Because the final legal outcome is uncertain, taxpayers are advised to file a “protective claim.” This type of claim is filed to preserve the taxpayer's right to a refund, pending the resolution of a legal case or other contingency. Without a protective claim filed by the deadline, a taxpayer may lose their right to a refund even if the Kwong decision is ultimately affirmed.

The new online portal, which the IRS quietly posted on its mobile-friendly forms page last week, is intended to ease the filing process. To use the electronic option, individuals must have an existing IRS Online Account. The agency instructs filers to write “Kwong vs. United States” across the top of the digital Form 843 to ensure it is processed correctly as a protective claim related to the case.

This new digital path, however, is not available to everyone. The online submission option is open only to individual taxpayers. Businesses, estates, trusts, and other entities must still file a paper version of Form 843 by mail. This distinction leaves many small and mid-sized companies facing the logistical challenges of a physical mailing to meet the same imminent deadline.

The tight timeframe has created a sense of urgency among taxpayers and tax professionals. “There’s a narrow window for taxpayers who haven’t filed a claim yet,” said Glen Frost of Frost Law Firm in a news release. “This new electronic portal creates a shortcut for people to get their refund request in before the deadline. If people paid penalties or interest during the pandemic, this is a last-minute chance to quickly file a claim.”

The launch of the portal follows public pressure from the National Taxpayer Advocate, Erin Collins. In an April 2026 blog post, Collins urged the IRS to create an electronic portal for Kwong-related claims to alleviate the “considerable burden” of paper filing, which often requires a trip to the post office to obtain proof of mailing. At the time, she also called on the agency to better publicize the issue so taxpayers would not miss the deadline. In a more recent post, Collins called the situation leading to the tight deadline “not a fair result” for taxpayers.

The exclusion of businesses from the new online tool means that many small and mid-sized companies must still contend with the paper filing process. For these entities, filing a protective claim requires printing and completing the form, then sending it via certified mail to have a verifiable record that it was sent before the July 10 cutoff.

In our experience, situations like the Kwong case create significant confusion for business owners who are already managing numerous financial and operational pressures. While the new portal is a welcome, if last-minute, development for individuals, the fact that businesses are excluded from this streamlined process highlights a persistent gap in IRS modernization. For companies that paid substantial penalties or interest during the pandemic years, the stakes are high, and the logistics of a paper filing under a tight deadline introduce unnecessary risk of error or missed postmarks.

This is precisely the kind of complex, time-sensitive issue where professional guidance is critical to avoid missteps. The legal nuances of the case, combined with the procedural requirements for filing a proper protective claim, demand careful attention. Business owners facing uncertainty over their eligibility or the filing process for these potential refunds should seek professional guidance. Navigating these nuanced tax situations is a core part of our tax preparation and compliance services. To ensure claims are filed correctly and on time, contact C&S Finance Group LLC at csfinancegroup.com for assistance.

With the Friday deadline looming, the immediate focus for affected taxpayers is on submitting their protective claims. Following that, all eyes will turn to the judicial system to see how the IRS's appeal unfolds. The government’s brief, due July 20, will be the next significant development in a case that could have financial repercussions for millions of U.S. taxpayers.