IRS May Owe New Yorkers Money Due To COVID Pandemic

The IRS may owe you money due to the COVID pandemic, but the deadline to file a claim is fast approaching.

The National Taxpayer Advocate says tens of millions of Americans have not received a refund from the IRS for income lost during the COVID-19 pandemic.

The IRS May Owe You Money From The COVID Pandemic

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It stems from a court ruling that says it should be treated the same way it would in the event of a natural disaster.

The money isn't coming automatically. You have to ask for it, and the deadline is fast approaching. A recent federal court ruling in a case called Kwong v. United States determined that, because COVID-19 was declared a federal disaster.

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That means tax filing and payment deadlines between January 20, 2020, and July 10, 2023, should have been automatically postponed, just as they would be in the event of a hurricane or other natural disaster.

Because those deadlines were technically paused under this ruling, the court found the IRS may not have had the authority to charge late-filing or late-payment penalties and interest during that period.

If you were hit with those kinds of charges during the pandemic years, you are likely eligible for a refund.

You Have To Claim It By July 10th

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If you think you might qualify, first, check your IRS transcript by logging into your Individual Online Account at IRS.gov and looking for any penalty or interest charges assessed between January 20, 2020, and July 10, 2023.

If you find them, you'll need to file IRS Form 843, which is the Claim for Refund and Request for Abatement.

Must Mail Out The Form

One important catch. These forms cannot be filed electronically right now. The National Taxpayer Advocate strongly recommends mailing them via certified mail so you have proof the claim was submitted before the deadline.

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Because the government may still appeal the court's ruling, the National Taxpayer Advocate suggests filing what's called a protective claim alongside your Form 843. This preserves your legal right to the refund even if the legal situation changes before everything is finalized.

According to the National Taxpayer Advocate, most people impacted are low to moderate-income taxpayers who may have no idea this option even exists.

If you had any IRS penalties or interest during the pandemic years and never got relief, this is worth looking into before the July 10 deadline passes.