When it comes to federal tax deadlines, April 15th is at the top of everyone’s mind. It is a date nearly synonymous with the IRS. It is the date some look forward to (triggering a refund – yay!), and some dread (payment of tax – ugh). However, there is another deadline that is fast approaching this year that you will want to remember: July 10, 2026.
July 10, 2026??? Yes! July 10, 2026 is the deadline for many to file (or to protect or reserve their right to such) certain refund claims for penalties and interest that accrued during the “period for disaster relief” due to the COVID-19 pandemic.
That date seems kind of random, why July 10, 2026? There is a body of statutes and regulations that are designed to provide relief to individuals and businesses affected by “federally declared disasters.” By implementing these statutes and regulations, the United States Congress recognized that when disasters strike, filing and paying taxes doesn’t make the “in the event of a disaster” to-do list for anyone. Yet, failing to timely file and pay one’s tax obligations can have severe financial consequences and result in hardships. That, on top of recovering from a disaster, can have brutal unintended consequences.
In 1988, the Stafford Act came into law which authorized the sitting president to declare any major event as a disaster.
In 1997, Section 7508A was added to the Internal Revenue Code as part of the Taxpayer Relief Act of 1997. Together with Section 165(i)(5)(A) (which defines “Federally declared disaster” as a disaster determined by the President pursuant to the Stafford Act), Section 7508A allows the IRS to postpone tax deadlines in the event of a “Federally declared disaster.”
When these statutes were passed, the types of “disasters” likely anticipated were disasters, such as, hurricanes, fire, and floods, which are generally limited in time and geographic scope. The drafters may not have considered a once-in-several-lifetimes disaster like the global pandemic of COVID-19.
However, on March 13, 2020, President Donald Trump declared the COVID-19 pandemic a disaster for all U.S. states and territories, thus, triggering Section 7508A. (Note: later, the President declared that there was a major disaster area in California “beginning on January 20, 2020, and continuing”—this is relevant for later in this Blog).
On May 11, 2023, over three years later, President Joe Biden formally declared the end of the COVID-19 pandemic.
OKAY, but why JULY 10, 2026?!? A 2019 version of Section 7508A (pre-amendment) stated that the certain listed filing and paying obligations that were postponed pursuant to Section 7508A, automatically ran from “the earliest incident date specified in the declaration” to “the date which is 60 days after the latest incident date so specified.” With respect to the Covid-19 pandemic, the sixty-day period from when President Joe Biden ended the pandemic (May 11, 2023) meant that this period ran through July 10, 2023.
Again, WHY July 10, 2026?!? The year 2026 is relevant here because the Internal Revenue Code requires that administrative refund claims be brought within the later of three years from the time a return was filed or two years from the time the tax was paid. Under the “three years from the time a return was filed” part of the refund rule, the latest a pandemic-era refund claim can be filed is July 10, 2026.
So, what is the beginning of the “period for disaster relief”? January 20, 2020.
Does this affect me? It might. Taxpayers who believe they fall into any of the following categories of taxpayers should reach out to an experienced tax controversy attorney to assess whether they have a potential disaster tax relief claim related to the Covid-19 pandemic. This is especially true for:
- Taxpayers currently in examination, appeals, or before the United States Tax Court, for any pandemic return year (2019-2022) where the IRS has proposed a tax deficiency (which would accrue interest during the January 20, 2020 – July 10, 2023 Covid-19 disaster period).
- Taxpayers who have been assessed a tax deficiency, including penalties and interest, for a period within the Covid-19 disaster period window, but have not paid it.
- Taxpayers who have recently settled their US Tax Court case for a pandemic return year (2019-2022).
- Taxpayers who have paid deficiencies, interest, and/or penalties related a pandemic return year (2019-2022) or any other period if interest and/or penalties accrued during the Covid-19 disaster period (January 20, 2020 – July 10, 2023)
- Taxpayers who have paid installment agreement payments during the January 20, 2020 – July 10, 2023 Covid-19 disaster period.
What should I do? If you believe that you fall into one of the categories above, please consult with an experienced federal tax controversy attorney to assess your case. While the July 10, 2026 deadline may apply to most cases, depending on the facts and circumstances of your specific case, your deadline could be a different date. Furthermore, your matter could require unique procedural strategy for claiming relief, thus, it is best not to delay in reaching out to an experienced federal tax controversy attorney.
So, I am guaranteed a refund related to my penalties and interest that accrued during the Covid-19 pandemic? No. Unfortunately, the January 20, 2020 – July 10, 2023 Covid-19 disaster period is not agreed upon by the IRS. This period comes from a case called Kwong v. United States. The Court of Federal Claims in Kwong took a broad view of Section 7508A, concluding that COVID-era disaster declarations tolled certain federal tax deadlines through July 10, 2023 even though Congress had subsequently amended Section 7508A which changed the end of the period from “the date which is 60 days after the latest incident date so specified,” to “the date which is 60 days after the later of such earliest incident date … or the date such declaration was issued.” Although the Court did not agree with the government’s interpretation of the statute, the Kwong decision can still be appealed by the government (but the government has yet to do so as of drafting of this blog).
That means that relief under Kwong is only potential. And, although it is not guaranteed, in many cases the potential for relief is so significant, it is worth protecting the claim for relief in case Kwong remains good law.
I’m reading your Blog after July 10, 2026, am I out of luck? Not necessarily, there are certain cases where the July 10, 2026 deadline will not apply. Your facts and circumstances must be analyzed. BUT DO NOT DELAY!!
If you believe you may be entitled to a refund of penalties and interest you paid to the IRS during January 20, 2020 through July 10, 2023, please reach out for a review of your potential matter. With over 25 years of experience counseling clients and representing them before the IRS, the tax controversy attorneys at Dickinson Wright are here to assist and do not hesitate to contact Emily L. Burdick at (313) 223-3127 or Angelique M. Neal at (734) 623-1940.
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About the Authors:
Emily Burdick
is a Certified Fraud Examiner and Michigan CPA with extensive experience in commercial litigation, tax disputes, and internal and regulatory investigations. She advises individuals and businesses on audits, controversies, contract disputes, and financial investigations, using her accounting and investigative expertise to analyze complex data and resolve disputes efficiently.
Angelique M. Neal
has over 20 years of experience in federal and state tax law, including audits, collections, and reporting compliance for individuals and businesses. She previously served as a senior IRS trial attorney and Special Assistant U.S. Attorney, giving her insight into IRS processes and tax dispute resolution.