WASHINGTON, July 9, 2026, 18:22 (EDT)
IRS sets a Friday deadline on some pandemic-era penalty relief, putting pressure on tax-prep firms to see how much off-season work they can win after April. The agency said people with an IRS Online Account can now file Form 843 online for fully paid interest and penalties relating to Kwong v. United States, but businesses and others still need to send paper claims.
This is grabbing attention now since the group impacted is big and mostly includes regular taxpayers, not just company tax teams. The National Taxpayer Advocate said tens of millions got hit with penalties or interest during the 3.5-year window in question. About 84% of those who paid assessed interest or penalties in the last two years had adjusted gross income under $100,000.
The claims are tied to Kwong, a U.S. Court of Federal Claims ruling that said COVID-19 disaster relief measures pushed back some tax filing and payment deadlines from Jan. 20, 2020 through May 11, 2023, then added 60 days. That pushed the deadline to July 10, 2023. Taxpayers usually have three years from filing or two years from payment to get a refund, so many now have a July 10, 2026 deadline to make claims.
National Taxpayer Advocate Erin Collins said the relief “will not happen automatically,” warning the process could create a divide between “well advised” taxpayers and those “unaware.” Filing a protective claim keeps the option for a refund open during ongoing litigation but doesn’t mean taxpayers will get money back. The claim does stop the deadline from expiring. Taxpayer Advocate Service
| Filing route | Who it mainly fits | Investor read-through |
|---|---|---|
| Electronic Form 843 | People with active IRS online accounts looking to get back Kwong-related penalties and interest that are already paid | Suits self-filers, cuts down on need for outside help with easy claims |
| Paper Form 843 | For businesses, filers without IRS online setup, or claims that don’t fit the e-file option | More paperwork; plays to tax pros handling these requests |
| Original or amended return | For taxpayers going after missed credits, unpaid withholding, or other refund adjustments | Tougher filings, more room for errors, more business for tax professionals |
H&R Block Inc. NYSE:HRB and Intuit Inc. NASDAQ:INTU are the two big public companies most tied to U.S. consumer tax prep. H&R Block posted a 5.3% gain in third-quarter revenue, citing higher average fees and more volume in U.S. assisted tax. Intuit reported TurboTax revenue up 7% to $4.4 billion in its April quarter and set TurboTax Live revenue guidance at $2.8 billion for the year.
| Company | Latest tax-season signal | How the July deadline could show up |
|---|---|---|
| H&R Block NYSE:HRB | Raised fiscal 2026 view, saying assisted segment is gaining share | Might see more advice-driven work after the season ends |
| Intuit NASDAQ:INTU | TurboTax Live on track for around 53% of TurboTax revenue | Could see an uptick if more filers want digital help |
| Local CPAs/enrolled agents | Not common in public markets | May compete for complex or late claims |
Both firms have already focused on a similar service mix ahead of the IRS deadline. H&R Block CEO Curtis Campbell said customers come to the company for “confidence, trust, and expert help.” Intuit CEO Sasan Goodarzi cited “AI-powered human expertise” as part of Intuit’s tax plan. H&R Block Tax preparation company
It’s a big number. The Associated Press said the IRS handed out over 120 million penalties from January 2020 to July 11, 2023. Treasury official Ken Kies told AP the administration thought Kwong was “wrongly decided.” Alyssa Maloof Whatley, director at Frost Law, told AP that filing lets taxpayers keep the right “to that money” if the ruling stands. AP News
But any boost for tax-prep stocks might be limited. The Justice Department has filed a notice of appeal, and according to the Taxpayer Advocate, the IRS might need years to sort through claims. The agency still lacks a standard process to handle a big wave of Kwong-linked filings. There’s also a new electronic option, so simple claims could skip paid preparers entirely.
Investors won’t be looking at Friday’s refund number. Instead, they’re watching to see if the IRS’s complex, deadline-heavy process drives up customer service calls, paid consults, and loyalty for companies that have been building up their assisted tax business after the main filing rush. Taxpayers just face a deadline: get a valid claim in, or they might miss out on a refund even if the courts don’t back the IRS later.
