The recent headlines have been buzzing with news of a potential COVID tax refund owed to millions of taxpayers. However, the reality is not as straightforward as it may seem. While there is a possibility of a refund, it is specifically for penalties charged for tax returns filed during the pandemic.
Dave Bohrman, co-founder and vice president of marketing at Tax Guard, explained, “This is a situation where a technical tax ruling could have real taxpayer impact, but it’s not as simple as ‘the IRS owes everyone money.'”
The recent court decision clarified the tax deadlines in place during disasters like the COVID-19 pandemic. The ruling addressed the IRS suspension of certain federal tax deadlines from Jan. 20, 2020, through July 10, 2023. According to the November 2025 court ruling, taxpayers can claim refunds for penalties assessed for filing and/or paying late, underpaying the amount due on a return, and other penalties and interest.
Ivan H. Golden, a partner at the Taft law firm, highlighted the significance of the court decision, stating that tax practitioners are recognizing its potential scope and the approaching deadlines to file refund claims.
Determining eligibility for the refund will require a thorough review of an individual’s tax filing history. Bohrman emphasized the complexity of the process, stating, “It requires people to go back, review what was charged, and, in some cases, take action to preserve their eligibility.”
Golden also noted that the potential refunds could be substantial for taxpayers who resolved audits or paid significant tax liabilities during the pandemic years. However, there is a time element to consider, as statutes of limitation for pandemic-era refund claims may begin to expire in 2026.
Despite the potential for refunds, there is uncertainty surrounding the case. Bohrman mentioned that the IRS is expected to challenge the ruling, prompting many advisors to recommend protective claims while the legal process unfolds. He emphasized the importance of awareness and follow-through for eligible taxpayers.
If you believe you may be entitled to a significant refund based on the court decision, it is advisable to consult with a tax professional to determine the next steps. Stay informed and proactive to ensure you do not miss out on any potential refunds owed to you.
