Washington– Tens of millions of taxpayers who have been penalized IRS During the coronavirus pandemic for non-payment or late filing of their taxes they may be eligible for a refund or an end to the penalties they incurred during that period.
However, the relief is not automatic or guaranteed, and most taxpayers need to file a claim to refund or cancel their tax liability by July 10 to get their money back.
The National Taxpayer Advocate, an independent IRS watchdog, warns that the deadline to file for relief is fast approaching after a federal court ruled late last year that taxpayers are not required to file their taxes on time during the coronavirus.
The IRS assessed more than 120 million penalties against tens of millions of taxpayers for filing late returns, not paying taxes, or failing to make required estimated tax payments between January 2020 and July 11, 2023.
The case, called Kwong v. US, said that emergency regulations related to the emerging coronavirus (COVID-19) extended the filing deadline and that the IRS owes taxpayers penalties. The case is still under litigation.
The taxpayer advocate describes the issue as “wide-ranging and not limited to a small or specialized group of taxpayers.”
Ken Keyes, Assistant Secretary at Ministry of TreasuryHe told The Associated Press that President Donald Trump’s Republican administration believes Kwong “made the wrong decision because it is a misreading of the plain language of the law.”
“We will continue to defend the legal language as it is written,” he said in a statement.
However, as it stands, taxpayers must fill out a form to preserve their rights, said Alyssa Maloof Whatley, principal at Frost Law, a tax firm with locations across the U.S.
She referred to the ruling, saying: “Either he stands or he does not stand.” “So, by maintaining your claim, you are actually preserving your right to that money.”
People eligible for a refund or potential reduction are those who filed a tax return late between January 20, 2020 and July 11, 2023; Pay filing or late payment penalties during that period; IRS fines owed even if they don’t pay them; Or provide international information late.
In a series of blog posts on his website, the taxpayer advocate shares recommendations — including having people review their IRS tax transcripts through their online accounts — to verify penalty assessments from those periods.
“Many of the taxpayers affected by this case have low and moderate incomes,” the taxpayer advocate said. “These taxpayers are less likely to obtain professional representation and learn about complex legal developments such as this one. As a result, they face a greater risk of missing the opportunity to claim the refunds they may be entitled to.”
People will need to fill them out, Maloof-Whatley said Form 843which can be found on the IRS website, and sent via regular mail.
According to the IRS, for people who received a penalty during the pandemic, the form must be mailed to a service center where they will be asked to file a tax return for the current year.
Because of the impending July 10 deadline, “taxpayers should not delay in reviewing their situation and considering potential claims for refunds and abatement,” the taxpayer advocate said.
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