Court ruling could result in millions of dollars in IRS coronavirus tax refunds
A federal court ruling has brought back the issue of COVID-19-era taxes and could leave some Americans owed refunds.
If you haven’t yet applied for a potential coronavirus-related tax refund and aren’t sure if you’ll be able to do so by the July 10 deadline, you may be on the hook.
The IRS has quietly added a tool to its website that allows you to electronically submit the forms needed to claim your refund. Form 843, also known as the Refund Claim and Relief Claim Form, typically must be submitted on paper or through a professional. However, on July 1, the IRS began electronically filing forms. only Regarding claims related to potential coronavirus refunds. The form is located on the mobile-friendly Forms web page on the IRS website.
Tens of millions of taxpayers may be entitled to refunds or relief of penalties and interest assessed by the IRS during the nearly 3 1/2-year federal disaster caused by COVID-19, but the only way to receive relief is to file a claim by July 10. If a claim is not filed, the opportunity to receive a potential refund or relief is forever lost.
“Time is of the essence for those considering applications,” said Glenn Frost, a founding partner at Frost Law.
Why are taxpayers entitled to a tax refund or reduction?
The potential for tax refunds stems from a federal judge’s ruling in Kwon v. United States late last year, which suggested that federal tax filing and payment deadlines would be automatically suspended during the federally declared COVID-19 disaster period from January 20, 2020 to May 11, 2023. The government is appealing the ruling, but if it stands, millions of Americans who paid or were charged late fees and interest over a three-and-a-half-year period could receive refunds. Because everything was on hold.
However, Americans cannot apply for refunds or reductions pending the outcome of the lawsuit. The law sets a time limit on how long a refund can be claimed, and tax experts said the formula would put the last day for a refund on July 10, 2026. The IRS has not advertised this because it likely won’t have to refund potentially billions of dollars to individuals, businesses, trusts and estates, but lawyers, accountants and independent national tax advocacy groups have been trying to get this information out for months.
How do I know if I’m eligible and how to apply?
Erin Collins of the Independent National Tax Advocate (NTA), law firms, and accountants have published guidelines and steps Americans can take to resolve this issue.
Collins said that while the focus is on potential refunds and reductions, the court’s decision in Kwon v. United States could impact other tax-related deadlines. These include whether some taxpayers are still eligible to claim prior year tax refunds, such as prior year withholdings, estimated tax payments, refundable credits, recovery rebate credits, or other tax benefits.
“This may include taxpayers who never filed an original return, as well as taxpayers who may benefit from filing an amended return to claim additional credits, deductions, and payments,” he said.
must act quickly
Potentially affected taxpayers should now check their records and consider whether they need to file a refund, amended, original, abatement, or protection claim. With the July 10 deadline approaching, the fastest and surest way to get your claim now is to use the IRS’ e-filing tool.
“A protection claim can preserve a taxpayer’s right to a refund even if the law remains unresolved,” Collins said. “Filing a claim does not guarantee relief, but passing the deadline may prevent taxpayers from receiving the refund they are ultimately entitled to.”
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Contact her at mjlee@usatoday.com and subscribe to the free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning..
