WASHINGTON — Tens of millions of taxpayers penalized by the Internal Revenue Service during the coronavirus pandemic for failing to pay their taxes or filing late may qualify for a refund or termination of those penalties. Most affected taxpayers must file a claim for a refund or abatement by July 10 to receive money back.

The IRS assessed more than 120 million penalties against tens of millions of taxpayers for filing late returns, failing to pay taxes, or failing to make required estimated tax payments between January 2020 and July 11, 2023. A federal court late last year ruled in Kwong v. U.S. that COVID-19 emergency laws extended the deadline to file tax returns and that the agency owes penalty payments to taxpayers. The case is still being litigated, and relief from the penalties is not automatic or guaranteed.

People eligible for a potential refund or abatement include those who filed a tax return late between Jan. 20, 2020, and July 11, 2023; paid penalties for filing or paying late during that period; owed IRS penalties even if they have not paid them; or filed an international information return late. Applicants need to fill out Form 843, available on the IRS website, and send it through postal mail. According to the IRS, Form 843 must be mailed to the service center where the taxpayer would be required to file a current year tax return.

The national taxpayer advocate, an independent watchdog of the IRS, is warning that the deadline to apply for relief is fast approaching. In a series of blog posts, the advocate recommended that people review their IRS tax account transcripts through their online accounts to check penalty assessments from those periods. The advocate called the issue "widespread and not limited to a small or specialized group of taxpayers."

The taxpayer advocate said, "Many taxpayers affected by this issue have low and moderate incomes. These taxpayers are less likely to have professional representation and to learn about complex legal developments like this one. As a result, they face a greater risk of missing the opportunity to claim refunds to which they may be entitled." The advocate also said, "Taxpayers should not delay reviewing their situation and considering potential claims for refund and abatement."

Alyssa Maloof Whatley, a director at Frost Law, urged taxpayers to submit claims while the litigation continues. "Either it holds up or it doesn't," she said. "So by preserving your claim, you're actually preserving your right to that money."

Ken Kies, assistant secretary at the Treasury Department, disputed the court's reasoning. "Kwong was wrongly decided because it is a misreading of the plain language of the statute," he said. "We will continue to defend the statutory language as written."