Fed says Kwong court misread COVID tax relief law

In its opening brief in a case that could affect millions of taxpayers and billions of dollars in potential refund claims, the federal government argued that a lower court misread a COVID-era tax relief law, turning a 60-day extension into a postponement period lasting more than three years.

The government asked the U.S. Court of Appeals for the Federal Circuit to reverse the Court of Federal Claims and dismiss Terry Kwong’s refund claims for tax years 2007, 2010 and 2011 as untimely.

In Kwong, the Court of Federal Claims held that the two-year deadline for filing a refund lawsuit was automatically postponed under Sec. 7508A(d) during the COVID-19 disaster period.

The court concluded that the postponement period began Jan. 20, 2020, and ended July 10, 2023, making Kwong’s lawsuit, filed Feb. 23, 2023, timely.

The brief argues that Congress deliberately tied Sec. 7508A(d) to incident dates in presidential disaster declarations rather than FEMA incident-period determinations. Read more.