Couple Sues IRS for Unpaid Tax Overpayment Interest From Covid-19

Lawsuit alleges IRS failed to implement mandatory disaster relief measures during pandemic, shorting millions on owed interest.

Published on Feb. 10, 2026

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A New York couple has filed a class action lawsuit against the IRS, alleging the agency failed to pay interest owed to taxpayers on tax overpayments during the Covid-19 pandemic. The lawsuit claims the IRS did not properly implement disaster-related postponements of tax filing deadlines, which should have suspended conditions that normally exempt the government from paying interest on overpayments.

Why it matters

The case highlights ongoing disputes over the IRS's handling of taxpayer relief efforts during the pandemic, which saw millions of Americans facing economic hardship. If successful, the lawsuit could force the IRS to pay out millions in owed interest to affected taxpayers across the country.

The details

According to the lawsuit filed by Martin Fleisher and Andrea Bierstein, an amendment to tax law should have suspended the 'interest-limiting exemptions' that normally allow the IRS to avoid paying interest on tax overpayments. The couple alleges the IRS failed to properly implement these disaster-related provisions, shorting taxpayers on the interest they were legally owed.

  • The lawsuit was filed on February 10, 2026 in the US District Court for the Southern District of New York.

The players

Martin Fleisher and Andrea Bierstein

A New York couple who filed a class action lawsuit against the IRS over unpaid tax overpayment interest during the Covid-19 pandemic.

IRS

The Internal Revenue Service, the federal agency responsible for administering and enforcing tax laws in the United States.

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What’s next

The lawsuit is seeking class action status to represent all affected taxpayers nationwide. A judge will determine whether to certify the class and allow the case to proceed.

The takeaway

This case highlights ongoing disputes over the IRS's handling of taxpayer relief efforts during the pandemic, and could force the agency to pay out millions in owed interest if the lawsuit is successful.