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A recent decision from the U.S. Court of Federal Claims could materially change how federal tax deadlines for the COVID‑19 emergency period are interpreted and whether certain penalties and interest were properly imposed.
In Kwong v. United States, 179 Fed. Cl. 382 (Nov. 25, 2025) (PDF - 222.38KB), the court interpreted the mandatory disaster-relief postponement provision in Section 7508A to apply from Jan. 20, 2020, through July 10, 2023. This postponement period is far broader than the discrete, notice-based relief the IRS argued was offered — most notably the deferral of April 15, 2020, filing and payment deadlines to July 15, 2020.
Although Kwong arose in the context of refund-suit timeliness as defined in Section 6532(a), the court’s statutory interpretation is being cited as a potential basis for refund or abatement claims with respect to penalties and interest computed by reference to due dates falling within that window.
Grant Thornton insight:
Because of the applicable statute of limitations under Section 6511, taxpayers should file abatement and refund claims before July 10, 2026.
Taxpayers should promptly evaluate whether they are impacted by Kwong, particularly where significant penalties or interest were paid in connection with deadlines during the COVID-19 period. If exposure exists, the ability to recover those amounts will depend on the applicable statute of limitations under Section 6511, which is highly fact-specific and generally requires claims to be filed within two years from the date of payment or three years from the filing of the return, whichever is later.
Taxpayers should consider filing a protective claim to keep the refund statute of limitations open while court cases interpreting Section 7508A are pending. Because these deadlines are already expiring for many taxpayers, timely action is critical.
For more information and insight on Kwong and the potential for refunds, please see our recent Tax Flash.
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