The Kwong ruling

In Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025), the U.S. Court of Federal Claims 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 government has appealed the ruling to the U.S. Court of Appeals for the Federal Circuit (notice of appeal filed mid-May 2026), so the law remains unsettled while the appeal is pending.

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. Claims that depended on that postponement had to be filed before the primary window closed on July 10, 2026.

— 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. We do not treat the ordinary two-year-from-payment rule as a reopened COVID product.

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 tied to a deadline in that historical 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 still handle ordinary penalty abatement and representation on a contingency basis — no upfront cost, no recovery means no fee. That is not a reopened COVID window. The steps for a live claim:

  1. You sign Form 8821. A one-page authorization that lets us pull your IRS account transcripts.
  2. We pull transcripts for the periods that are still in play — not a 2020–2023 COVID sweep sold as if the disaster window were open.
  3. We prepare Form 843 only when a current ground still supports a claim (reasonable cause, FTA on a transition period, ordinary §6511 refund). 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.
— No new COVID protective claims —

The government appealed Kwong to the Federal Circuit. That pending appeal does not reopen the primary claim window that closed July 10, 2026. We do not sell new COVID protective claims as if the deadline were still ahead.

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:

  • Ordinary §6511 still applies to penalties paid recently for any reason — that is not a COVID product.
  • If you were assessed penalties for any later reason, you may still have AEP or FTA on a transition period or reasonable-cause relief. Those paths are not tied to the closed Kwong window.
  • 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 if you have a later penalty or a balance. Enter your name, email, and a rough estimate. We respond within one business day with what still applies — abatement, AEP/FTA, or resolution — not a reopened COVID claim.