Overview

Recent developments may allow refunds or abatements for certain penalties and interest related to federal filing or payment deadlines that fell between January 20, 2020, and July 10, 2023. Relief is not automatic, and eligibility will depend on the taxpayer’s specific facts. The matter is currently unsettled but taxpayers may want to consider filing a claim to preserve their rights. For many, July 10, 2026 may be an important deadline, although the applicable limitations period will depend on their filing and payment history.

Background

A recent federal court decision, Kwong v. United States, held, in the context of refund-suit timeliness, that former §7508A(d) postponed certain time-sensitive federal tax deadlines during the COVID-19 disaster period, which the court treated as running from January 20, 2020, through July 10, 2023. The IRS had limited relief to a much shorter administrative window, but the court concluded that the statute, rather than IRS guidance, controlled the duration of the suspension. The government has appealed the decision, and the scope of its application outside the litigation context remains unsettled. If the taxpayer-favorable interpretation ultimately prevails, some penalties and interest tied to filing or payment deadlines falling within that period may be subject to refund or abatement claims.

Relief is not automatic or guaranteed, and there is no IRS refund program currently in place. Depending on the facts, taxpayers across a range of entity types may wish to evaluate whether they have a timely claim.

What May Be Recoverable

Potential claims may include certain charges computed by reference to filing or payment deadlines falling between January 20, 2020, and July 10, 2023, subject to the taxpayer’s facts and the ultimate resolution of the issue:

• Failure-to-file penalties (§6651(a)(1))
• Failure-to-pay penalties (§6651(a)(2))
• Estimated tax underpayment penalties (§6654/§6655)
• Underpayment interest potentially tied to obligations with filing or payment deadlines falling within the disaster period
• Potentially, penalties on late international information returns

Note: The government disputes the court’s interpretation and may raise additional procedural and substantive defenses, including arguments regarding the scope of any postponement and whether particular liabilities qualify. This area remains unsettled.

Timing & Uncertainty

The law is unsettled and the government has appealed the decision. Filing a claim does not ensure recovery, and the appropriate filing position will depend on the taxpayer’s facts, the nature of the liability, and how the courts ultimately resolve the issue. A refund or abatement claim is generally filed on Form 843 and may be submitted as a protective claim to preserve the statute of limitations while the issue develops or, where appropriate, as a perfected claim. For many taxpayers, July 10, 2026 may be an important deadline but the applicable limitations period should be analyzed based on the taxpayer’s specific filing and payment history.

Please contact us if you would like to discuss how these developments may affect you.
 

Published: 05/29/2026

_{^{Readers should not act upon information presented without individual professional consultation.}}

_{^{Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.}}