The Kwong ruling

In Kwong v. United States, decided by the U.S. Court of Federal Claims in late 2025, the court held that the IRS improperly charged penalties and interest during the COVID-19 pandemic by failing to apply the automatic deadline postponement required under IRC § 7508A(d). That statute postpones federal tax deadlines for the duration of any FEMA-declared incident period plus 60 days. Because COVID-19 was declared a nationwide disaster under the Stafford Act, the postponement reached every U.S. taxpayer.

The mechanics: the federal COVID-19 disaster declaration was in effect from January 20, 2020 through May 11, 2023. Under IRC §7508A(d), the IRS is required to postpone affected federal tax deadlines for the entire incident period plus an additional 60 days — extending the effective window to July 10, 2023 for tax purposes. The new effective due date for any obligation falling within that window is July 11, 2023. Anything the IRS assessed on the original (pre-postponement) deadline is recoverable.

— Refund Statute of Limitations —

Under IRC § 6511, a refund claim must be filed within the later of three years from the original filing date or two years from the date the penalty or interest was paid. For most taxpayers affected by the COVID-era postponement, that three-year window closed on July 10, 2026, and the refund is now permanently forfeited — no matter how strong the legal grounds. The only claims that remain live are those where the penalty was paid within the last two years, under the two-year-from-payment branch of § 6511.

What penalties qualify

The Kwong analysis applies to any penalty or interest charge tied to a deadline that fell within the postponement window. In practice, that includes:

  • Failure-to-File (FTF) penalties — assessed when a return was deemed late under the pre-postponement deadline.
  • Failure-to-Pay (FTP) penalties — assessed when a balance due was deemed late.
  • Underpayment interest and late-payment interest accrued during the window.
  • Estimated-tax penalties, where the underpayment was tied to a postponed deadline.
  • Certain information-return penalties — protective claims are advisable where the return was due in the window.

Who is eligible

The disaster declaration was nationwide, so eligibility is not geographically restricted. Eligible taxpayers include:

  • Individuals (any filing status)
  • Businesses — LLCs, S-corps, C-corps, partnerships, sole proprietors, 1099 contractors
  • Nonprofits
  • Estates and trusts with returns due in the window

Eligibility does not depend on whether the underlying return was filed late by choice, by hardship, or for any other reason. The legal question is whether the IRS applied the postponement; it almost universally did not.

What our process looks like

We handle COVID-era abatement on a contingency basis — no upfront cost, no recovery means no fee. The steps:

  1. You sign Form 8821. A one-page authorization that lets us pull your IRS account transcripts.
  2. We pull transcripts for the 2020–2023 tax years and flag every penalty or interest line that accrued in the postponement window.
  3. We prepare Form 843 with a legal-support memorandum citing Kwong, IRC § 7508A(d), and the FEMA disaster declarations. You sign the form (Form 843 requires a wet signature).
  4. We file directly with the IRS service center handling your account and track the matter through resolution. Most refunds are issued within 60–120 days.
— Protective Claims —

Because Kwong is recent and government appeals are possible, the conservative move is to file a protective refund claim immediately. A protective claim preserves your statutory right to the refund even if the underlying law evolves during the claim's adjudication. Filing now is materially better than waiting for further case development.

What if you missed the window

The July 10, 2026 deadline was a hard statutory cutoff under IRC § 6511, and the IRS has no discretion to extend it. If your COVID-era penalties were paid in 2020–2023 and you did not file a claim in time, that specific refund is unfortunately closed. But it is rarely the end of the road:

  • If you paid a COVID-era penalty within the last two years, the two-year-from-payment branch of § 6511 may still support a claim — use the calculator on this page to check.
  • If you were assessed penalties for any reason — COVID-era or not — you may still qualify for first-time abatement or reasonable-cause relief, which are not tied to the Kwong deadline.
  • If you currently owe the IRS, our tax-resolution programs — payment plans, offers in compromise, and levy releases — address the balance directly.

Start with the calculator on this page. Enter your name, email, and a rough estimate of the penalties and interest you paid, and we'll respond within one business day to confirm whether any claim or relief is still available to you.