Form 1120 (C-Corp) COVID Penalty Refund

C-corporations assessed Form 1120 penalties or interest during the COVID-19 disaster period (Jan 20, 2020 – July 10, 2023) may be eligible for refunds under the Kwong reasoning. Corporate refund amounts are typically larger than individual returns. File Form 843 by July 10, 2026. Refund eligibility is not guaranteed; Kwong is being appealed.

Who qualifies

C-corporations subject to failure-to-file (IRC §6651(a)(1)), failure-to-pay (§6651(a)(2)), or corporate estimated-tax (§6655) penalties on Form 1120 returns during the disaster window may have a claim. The Kwong reasoning applies equally to corporate filers: deadlines suspended automatically during the COVID-19 disaster period mean penalties tied to that period may not have been legally valid.

  • Your corporate tax account transcript shows a penalty or interest assessment dated between Jan 20, 2020 and July 10, 2023.
  • The penalty applies to a Form 1120 originally due, late-filed, or late-paid within the disaster window.
  • Estimated-tax penalties under §6655 for corporate quarterly installments due during the window may also qualify.

How much could I get back?

Per PenaltyBack's homepage data as of 2026-05-08, the average business refund being processed is approximately $27,645, though larger corporations with substantial penalty assessments may be eligible for materially more. Smaller C-corps may see refunds in the $1,000–$10,000 range. Refund eligibility and amounts cannot be guaranteed.

Why this specifically

Corporate penalty assessments under §6651 and §6655 can scale to material amounts — particularly for corporations that had large balances due or missed estimated-tax payments during the pandemic. Many CFOs and controllers wrote off these assessments as the cost of doing business. Kwong creates a credible basis to revisit them.

FAQ

Does the corporate-officer signature on Form 843 require a board resolution?

Form 843 is signed by an authorized officer of the corporation — typically a C-suite officer or a person authorized via a corporate resolution or POA on file with the IRS. PenaltyBack prepares the package; the corporation's standard signing authority applies.

Can we claim refunds for both failure-to-file AND failure-to-pay on the same return?

Yes. If both penalties were assessed during the disaster window on the same return, both may be eligible. They're typically claimed on the same Form 843 with each penalty itemized.

What about §6655 estimated-tax penalties on quarterly installments?

Estimated-tax penalties for corporate installments that fell due inside the Jan 20, 2020 – July 10, 2023 window may also qualify. The same Kwong reasoning applies — deadlines suspended, penalties tied to those suspended deadlines may not have been valid.