COVID-19 disaster relief case has implications for timely refund claims

The Court of Federal Claims held in Kwong, 179 Fed. Cl. 382 (2025), that a taxpayer’s refund claim filing deadline was automatically extended by Sec. 7508A(d)(1) due to the COVID-19 disaster declaration.

A recent blog post by National Taxpayer Advocate Erin Collins highlighted Kwong and how the decision might extend the filing deadlines for taxpayers who may be entitled to refunds or abatements of penalties and interest that the IRS assessed during the COVID-19 federal disaster period — if the taxpayers act quickly.

The case was brought by Terry Kwong, whose refund claims for penalties he had paid were denied by the IRS as untimely under the two-year limit of Sec. 6532(a)(1).

The court, however, held that an extension period began on Jan. 20, 2020, when the disaster was declared, and ended on July 10, 2023, 60 days after the disaster period ended, and after Kwong had filed suit on Feb. 23, 2023. Kwong’s claims, it therefore held, were filed timely.

“By the court’s logic, the IRS should not have assessed penalties for late filing or payment during that 3.5-year period, nor charged interest on those amounts,” Collins wrote. She expects the Department of Justice to appeal the Kwong decision to the Federal Circuit. Read more.