The IRS normally imposes late filing and late payment penalties. However, the Court of Federal Claims held that tax returns and payments that would ordinarily be due from January 20, 2020, to July 10, 2023, were postponed to July 11, 2023, by operation of 7508A of the Internal Revenue Code. This applies to income taxes, gift taxes, estate taxes, excise taxes, and employment taxes, together with associated returns. According to the National Taxpayer Advocate, this means that the IRS unlawfully imposed penalties on tens of millions of taxpayers during this period. For example, if you paid taxes owed for the 2020 tax year on July 10, 2023, instead of April 15, 2021, the IRS probably assessed a penalty against you. That penalty would be unlawful. However, these penalties will not be automatically refunded. Instead, Form 843 must be filed by July 10, 2026, to claim that amount plus interest compounded daily. This is a new development that most IRS employees are likely unaware of and may dispute. Consequently, a qualified tax practitioner is needed to properly file Form 843 and explain the legal position to the IRS. If you are interested in filing such a refund claim, please contact (916) 822-8700.
Last Chance to Refund IRS Penalties Paid in 2020, 2021, 2022, or 2023
