"The court ruled that the disaster-relief provision in Internal Revenue Code Section 7508A requires the IRS to pause all penalties and interest throughout the entire disaster period, plus an additional 60 days."
"Erin Collins, the national taxpayer advocate, wrote that tens of millions of taxpayers could be eligible for COVID-era refunds, given that they were hit with penalties or interest for late filings or payments during this period."
"This issue is widespread and not limited to a small or specialized group of taxpayers."
"Taxpayers may be eligible for refunds or abatements of penalties and interest the IRS assessed during the COVID-19 federal disaster period."
The U.S. Court of Federal Claims ruled that the COVID-19 pandemic paused federal tax deadlines from January 2020 to July 2023. This ruling mandates the IRS to waive penalties and interest during this period, allowing taxpayers more time to file and pay taxes. Erin Collins, the national taxpayer advocate, indicated that many taxpayers could be eligible for refunds due to penalties incurred during this time. The ruling impacts individuals, small businesses, corporations, trusts, and estates, and taxpayers can file claims for refunds despite a potential appeal by the DOJ.
Read at Fast Company
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