Updated on June 13, 2026 by David Korpel
A recent federal court decision may create an opportunity for certain taxpayers to recover IRS penalties and related interest that were assessed during the COVID-19 disaster period. Here’s what you need to know — and what you may want to do before a key deadline passes.
What Is the Kwong Case?
In Kwong v. United States, the federal court concluded that certain federal tax filing and payment deadlines were automatically postponed from January 20, 2020 through July 10, 2023 — the COVID-19 disaster period. Under the statute, that entire period “shall be disregarded” when calculating penalties and interest owed to the IRS.
The case builds on a related decision, Abdo v. Commissioner, and together they rejected the IRS’s position that the postponement period was capped at one year. The court found that the law mandated a longer postponement — and that penalties assessed during that extended window may not have been proper.
While the case remains subject to further legal proceedings, we are recommending that potentially affected taxpayers preserve their rights by filing protective claims before applicable deadline expires on July 10, 2026.
Does This Apply to You?
If you filed your returns on time and do not recall being assessed any penalties during this period, this likely does not apply to you.
You may be affected if you or your business were assessed any of the following during the period from January 20, 2020 through July 10, 2023:
- Failure-to-file penalties
- Failure-to-pay penalties
- Estimated tax penalties
- Related interest
The tax years most likely to be affected are 2019, 2020, 2021, and 2022.
Step 1: Review Your IRS Account Transcripts
To find out whether you were assessed penalties during the affected period, you’ll need to review your IRS account transcripts directly. Please note that ENGAGE CPAs does not have access to your IRS account transcripts, so this is a step you will need to take on your own.
For individuals:
- Log in to your IRS.gov account at irs.gov (or create one if you haven’t yet).
- From the main dashboard, click Records & Status, then Tax Records.
- Click View Transcripts.
- Review your Account Transcripts for tax years 2019 through 2022 and look for any penalties or interest assessed on returns, payments, or estimated tax obligations that were due during the COVID-19 period.
For business entities (C corporations, partnerships, S corporations):
If you owned a business entity during these years, you can also review account transcripts for those entities by logging in to your IRS.gov business account (or creating one if you haven’t yet).
Step 2: File a Protective Refund Claim Using Form 843
If you find penalties or interest that fall within the affected period, you may be able to request a refund or abatement by filing Form 843, Claim for Refund and Request for Abatement. Here’s how to complete it:
At the top of Form 843: Write — “Protective Refund Claim Pursuant to Kwong v. United States.”
Line 2: It is not necessary to provide the exact refund amount at this stage. You can write: “Protective claim — exact amount to be determined from IRS account transcripts and final resolution of Kwong-related litigation.” If you prefer, you can calculate the amount and attach copies of your account transcripts.
Line 7: Check the “other” box and write: “Interest and penalty refund/abatement based on recalculation of interest and penalties under IRC Section 7508A(d).”
Line 8: This is where you describe the nature of the claim. Here is example language you can use:
This is a protective claim for refund and/or abatement of penalties, additions to tax, and interest assessed or collected for the tax period identified above. The claim is based on Kwong v. United States, 179 Fed. Cl. 382 (2025) and Abdo v. Commissioner, 162 T.C. 148 (2024), which held that the 2019 version of IRC Section 7508A(d) mandated postponement of tax filing and payment deadlines during the COVID-19 disaster period plus 60 days. Both cases rejected the application of Treas. Reg. Section 301.7508A-1(g)(3)(i), which purported to cap the postponement period to one year. Kwong v. United States held that the COVID-19 disaster period extended from January 20, 2020, through July 11, 2023. The taxpayer’s refund due date/payment due date/penalty assessment date fell within the COVID-19 disaster period, and therefore the interest/penalty assessed is contrary to the mandatory relief provided by statute. The taxpayer requests that the IRS hold this claim pending final resolution of the Kwong issue and allow the taxpayer to supplement the claim as needed to determine the exact refund amount.
A Few Important Filing Notes
- File on paper. The protective refund claim must be filed on paper, personally signed by the taxpayer, and mailed to the address listed in the Form 1040X instructions under “Where To File.”
- Send by certified mail. Given that the IRS may be inundated with paper claims related to this case, certified mail makes it virtually impossible for the IRS to later claim it never received your filing.
- File separately for each tax year. If multiple years are involved, a separate Form 843 is required for each year.
What to Expect After Filing
Once filed, prepare to wait. The IRS will generally delay action on a protective claim until the underlying litigation is fully resolved. That means the IRS will likely not process or pay any refunds until the Kwong appeals and related cases work their way through the courts — a process that could take years.
Act Before July 10, 2026
We have identified July 10, 2026 as a key date for preserving your rights related to the Kwong decision. Refund claim deadlines may apply, so we encourage you to act promptly if you believe this may affect you.
ENGAGE CPAs is not able to provide individualized transcript analysis or assist with preparing or filing Form 843 claims related to the Kwong decision. However, most taxpayers should be able to complete this process on their own by reviewing their transcripts and filing the appropriate forms. If you have general questions, don’t hesitate to reach out.
