04/02/2026
There is some interesting news in the tax law world that I wanted to make sure my contacts are aware of. There are some recent court cases that together hold that the IRS was not allowed to charge most types of penalties, interest, or make certain assessments for the entire time period of the COVID-19 pandemic. This means from January 20, 2020 through July 10, 2023. Unfortunately, the IRS read the law differently and made regulations that directly contradicted the law and were later overturned, so it didn't automatically avoid making these assessments, so millions of taxpayers have been charged various penalties and interest wrongfully. This covers any form of tax (including income, payroll, estate, gift, and possibly various information returns), so any person who was charged interest or penalties for those tax periods should get in contact with a knowledgeable tax professional right away, because the deadline to file a refund claim for most people is July 10, 2026. I hate telling people they "have to act now" because it sounds sleezy, but this really is a situation where time is of the essence because for most people and businesses, if they don't file by July 10, 2026, they will forever lose their right to any refund based on this.
The law here is still unsettled and we in the tax community are expecting the IRS to push back on these and other related pending cases very strongly, but this could potentially be a substantial possible recovery or relief for affected individuals and businesses that they will lose out if they don't at least file a protective claim by July 10, 2026. Because of the unsettled nature of the law, the complexity of calculating the amounts potentially subject to abatement or refund, and the administrative hurdles that are likely to have to be overcome in pursuing the remedies, I highly recommend that people not try to submit these claims on their own.
Please do not comment on this post or similar posts if you think this situation applies to you and want more information from me, but feel free to reach out to me directly through a DM or through my work contact information.
