In Kwong v. United States, the US Court of Federal Claims ruled that Internal Revenue Code (IRC) § 7508A(d) automatically postponed federal tax filing and payment deadlines for the entire COVID-19 federally declared disaster period, which ran from January 20, 2020, through July 10, 2023.
Under this ruling, tax return and payment deadlines that occurred anytime during the federally declared disaster period should have been postponed until July 10, 2023, and the IRS should not have assessed any late filing or payment penalties or interest during this period. Therefore, taxpayers who were impacted by late filing or payment penalties or interest during the eligible period may be entitled to penalty and interest refunds.
The IRS has appealed the decision to the US Court of Appeals for the Federal Circuit. However, despite the ongoing litigation, employers who received penalties and/or interest for late filing during the federally declares disaster period should file a protective claim by July 10, 2026 to protect your organization’s rights if the Kwong decision is upheld. A protective claim must be filed via IRS Form 843 for each affected tax year.
Think you may be eligible for refunds? Contact Jeremy Muchnick, Enrolled Agent ([email protected]) today to make sure you don’t miss this important opportunity!