Events
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Kwong Decision and How It Affects Your Clients
AFIT Seminar
The Kwong V. United States court decision and how it affects you and your clients, presented by the Arizona Forum for Improvement of Taxation (AFIT)
Join us as Edward Zollars, CPA and noted tax authority presents a 2 hour webinar on the implications of the Kwong V. United States: A Path to IRS Refunds This webinar will be May 28th,at 10:00am Arizona time.
Can I get an IRS penalty refund due to COVID-19?
Yes. A landmark court decision, Kwong v. United States, ruled that the IRS improperly charged penalties and interest during the COVID-19 pandemic. If you paid Failure-to-File, Failure-to-Pay, or Underpayment Interest and/or late-payment interest on tax obligations due between January 20, 2020, and July 10, 2023, you may be eligible for a full refund or abatement. For most taxpayers, the deadline to file refund or abatement claims is July 10, 2026.
The Kwong v. United States Decision: A Path to IRS Refunds
A late-2025 court decision from the U.S. Court of Federal Claims, Kwong v. United States, has opened a path for individuals, companies, and nonprofits to recover IRS penalties and interest charged during the COVID-19 disaster period.
The court held that Internal Revenue Code § 7508A(d) automatically postponed federal tax filing and payment deadlines for the entire FEMA-declared incident period, plus 60 days.
Key Facts We will be discussing: Kwong Decision and Your Taxes
1. Postponement Period: January 20, 2020, through July 10, 2023.
2. Effective New Due Date: July 11, 2023.
3. Eligible Penalties: Failure-to-File (FTF), Failure-to-Pay (FTP), and Underpayment Interest.
4. Deadline to File Refund or Abatement Claims For Most Taxpayers: July 10, 2026.
Who is eligible for a Kwong refund?
Eligibility under Kwong is broader than many taxpayers initially assumed:
• Individuals and Entities: Includes all individuals, businesses, and nonprofits with obligations due between Jan. 20, 2020, and Jul. 10, 2023.
• Geographic Scope: Because COVID-19 was a nationwide disaster, nearly all U.S. taxpayers meet the qualified taxpayer geographic requirement.
• Pre-existing Accruals: Taxpayers whose original due date preceded Jan. 20, 2020, may still have relief arguments for the portion of interest/penalties that accrued within the disaster period.
• Other Penalties: Estimated tax penalties and certain information-return penalties may also be eligible for protective claims.
Deadlines: How long do I have to file a claim?
Refund claims are generally limited by IRC § 6511 to the later of three years from the filing deadline or two years from payment. Because Kwong treats the COVID-19 period as extending deadlines through July 10, 2023, for most taxpayers, the deadline to file refund or abatement claims is July 10, 2026.
Filing a protective claim is crucial to preserve your rights while the government potentially appeals this decision. Filing a claim does not guarantee you will receive a refund, but not filing a claim will assure you will not receive any refund.
Discussion on How to Pursue Your Refund will include:
1. Pull IRS Account Transcripts: Using your IRS.gov account, review account transcripts for tax years 2019 to 2023 and flag any penalty and interest entries.
2. Map the Accrual Dates: Any charges accruing between Jan. 20, 2020, and Jul. 10, 2023, deserve a closer look.
3. Prepare Form 843: File a Claim for Refund and Request for Abatement.
4. Include Legal Support: Attach a concise statement citing IRC § 7508A(d) and Kwong, along with relevant transcripts and notices.
5. Calendar Deadlines: Coordinate your timing for administrative claims and potential refund suits (a refund suit generally must be filed within two years of the administrative refund claim submission).
There will be 2 hours of IRS approved Continuing Education available for this webinar upon successful attendance of entire webinar and answered polling questions.
Cost of the Webinar is $99.00
For more information and to register, visit the AFIT website.
