2020 Tax Year COVID Penalty Refund

Why 2020 matters specifically

2020 was the year the pandemic dominated IRS operations. Original Form 1040 returns were due April 15, 2021, and Notice 2021-21 postponed the filing and payment deadline to May 17, 2021 for most individual returns. Notably, Q1 2021 estimated-tax payments were not postponed — those remained due April 15, 2021, and many taxpayers were assessed § 6654 penalties as a result. Returns filed beyond May 17, 2021 were assessed § 6651 failure-to-file penalties; balances paid after that date triggered § 6651(a)(2) failure-to-pay accrual.

Under IRC § 7508A(d), the COVID-19 federally declared disaster triggered a mandatory extension period. The November 2025 Court of Federal Claims decision in Kwong v. United States, 179 Fed. Cl. 382, read § 7508A(d) to require deadline suspension across the full COVID-19 period, broadly January 20, 2020 through July 10, 2023. Almost every 2020 penalty assessment lands inside that window.

The Kwong ruling is currently being appealed, so eligibility is not guaranteed. A protective Form 843 filed now preserves the claim regardless of how the appeal resolves.

2020 penalties that may qualify for refund

2020 returns generated the broadest set of in-window assessments:

• Failure-to-file (TC 166 / TC 160) under IRC § 6651(a)(1).
• Failure-to-pay (TC 276 / TC 270) under IRC § 6651(a)(2).
• Estimated-tax (TC 170 / TC 176) under IRC § 6654 — including the Q1 2021 installment that was not postponed.
• Information-return penalties (TC 240) under §§ 6721 and 6722.
• Underpayment interest (TC 196 / TC 340).

Many 2020 filers were assessed both TC 166 and TC 276 on the same return. A protective Form 843 lists each separately. See failure-to-file vs failure-to-pay.

Filing deadline for 2020 refund claims

IRC § 6511 generally requires the refund claim be filed within (a) 3 years of original return filing or (b) 2 years from the date the tax was paid, whichever is later. For 2020 returns:

• A 2020 Form 1040 filed on May 17, 2021 may have a 3-year window that closes on or around May 17, 2024 — many of those windows have already passed for the underlying liability. Penalty payments made later may extend the relevant 2-year window.
• 2020 returns filed late (e.g., in 2022 or 2023) may have 3-year windows that close in 2025 or 2026 and remain actionable today.
• The § 7508A(d) suspension theory in Kwong may further extend these windows for in-window assessments.

If you are not sure which deadline applies to your specific 2020 filing, file the protective claim now. Confirm the dates against your transcript.

What to look for on your 2020 transcript

Pull your 2020 IRS account transcript — see our transcript guide. Look for:

• TC 150 — your 2020 return assessment date.
• TC 166 / TC 160 — § 6651(a)(1) failure-to-file penalty.
• TC 276 / TC 270 — § 6651(a)(2) failure-to-pay penalty.
• TC 170 / TC 176 — § 6654 estimated-tax penalty.
• TC 240 — miscellaneous penalty.
• TC 670 — payment of an assessed amount; relevant to the 2-year-from-payment window.
• TC 290 / TC 291 — later additional assessment or abatement.

Any 2020 penalty with a 23C date inside the disaster window (broadly January 20, 2020 through July 10, 2023) may be a Kwong candidate.

Worked example: a 2020 Form 1040 filer with stacked penalties

Consider an individual taxpayer who owed $18,000 on her 2020 Form 1040 and filed the return on November 8, 2022, eighteen months after the May 17, 2021 postponed deadline. The IRS assessed:

• A TC 166 failure-to-file penalty of $4,500 (25% cap on unpaid tax) with a 23C date of December 12, 2022.
• A TC 276 failure-to-pay penalty of approximately $1,620 (0.5% per month for 18 months on the unpaid balance) with the same 23C date.
• TC 196 underpayment interest of approximately $1,300.

The taxpayer paid the full assessed balance, including penalties and interest, in February 2023. All three transaction dates fall inside the disaster window. Her § 6511 2-year-from-payment window measured from February 2023 may remain open into 2025, and the § 7508A(d) suspension theory in Kwong may extend it further.

A protective Form 843 referencing IRC § 7508A(d), Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025), and each TC entry preserves a refund claim of approximately $7,420 in penalties plus the in-window interest. If Kwong is affirmed on appeal, the IRS may refund those amounts plus statutory interest.

Common 2020 scenarios

Filed by May 17, 2021 but assessed a failure-to-pay penalty

Many 2020 filers met the May 17, 2021 postponed deadline but had unpaid balances that triggered § 6651(a)(2) accrual after that date. The Kwong reading may extend the deadline-suspension period further, in which case those late-payment assessments may be refundable.

Q1 2021 estimated-tax penalty for 2020 underpayment

Q1 2021 estimated-tax payments were not postponed by Notice 2021-21 — they remained due April 15, 2021. Many 2020 filers were assessed § 6654 penalties tied to that installment. Because the Q1 2021 installment due date sits inside the disaster window, those penalties may be candidates for a Kwong-based claim.

Already received automatic relief under Notice 2024-07

Notice 2024-07 provided automatic failure-to-pay penalty relief for back-tax balances on 2020 and 2021 returns. If your 2020 penalty was fully covered, there is nothing further to claim. If only part was covered — or if your filing fell outside the notice's specific windows — the residual amount may still qualify under Kwong.

How PenaltyBack handles 2020 claims

We pull your IRS account transcript, identify in-window 2020 penalty assessments, and draft a Form 843 protective claim that references IRC § 7508A(d), Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025), and the specific transaction codes from your transcript. We file under our authorized representative status. Our work is no-win, no-fee — if the IRS does not refund the penalty, you owe nothing. The Kwong appeal is pending; the protective claim preserves your right regardless of how the appeal resolves.

Frequently asked questions about 2020 claims

My 2020 return was extended to May 17, 2021 — does the Kwong analysis still apply?

Yes. Kwong reads § 7508A(d) suspension as running through the entire disaster period, not just the headline notice extension. Penalties for filings or payments after May 17, 2021 may still be challengeable.

I got both a TC 166 and a TC 276 on my 2020 return. Can I claim a refund on both?

Yes. Each is a separate statutory assessment under § 6651. A protective Form 843 lists each penalty separately and claims a refund or abatement of each.

What is the latest I can file a Form 843 for my 2020 penalty?

It depends on filing and payment dates. The 3-year-from-filing window may have closed for early 2020 filings, but the 2-year-from-payment window may still be open if you paid the penalty later. The § 7508A(d) suspension may extend further. File the protective claim now to lock in your position.

I already got automatic relief under Notice 2024-07 — does Kwong apply to my remaining balance?

If part of your 2020 penalty was not covered by the notice, the residual may qualify under Kwong. Pull the current transcript to confirm what remains assessed.

My Q1 2021 estimated-tax payment was assessed a penalty for 2020 — does that count?

Q1 2021 was due April 15, 2021, inside the disaster window. § 6654 penalties tied to that installment may be Kwong candidates and should be listed separately on the Form 843.

Related

For background: Kwong v. United States, explained. For transcript guidance: How to read your transcript. For Form 843 wording: Form 843 protective claim wording. For the deadline: The IRS may owe you money from COVID — file by July 10, 2026.