IRS appeals Kwong as advocate says refunds may be at stake

The IRS has appealed the decision in Kwong, in which the Court of Federal Claims held that the filing deadline for refund claims for penalties and interest was automatically extended by Sec. 7508A(d) due to the COVID-19 disaster declaration.

The notice of appeal in Kwong, which did not include a brief outlining the IRS’s position, was filed last month in the U.S. Court of Appeals for the Federal Circuit. The appeal follows the Court of Federal Claims’ decision, in which the court held that Sec. 7508A(d) suspended filing and payment deadlines during the COVID-19 disaster period.

In a recent blog post, National Taxpayer Advocate Erin Collins said the decision could have implications beyond penalties and interest, including whether some taxpayers still have time to file refund claims for tax years 2019 through 2022.

“Taxpayers should carefully evaluate their individual circumstances before filing claims based on the court’s reasoning,” Collins said. “Even though the law is still developing, many taxpayers may need to act on or before July 10, 2026, to protect potential refund rights while the courts continue deciding these issues.” Learn more.