A recent federal court ruling, Kwong v. United States, has opened a potential window for taxpayers to recover certain IRS penalties and interest tied to the COVID-19 pandemic.
If you paid failure-to-file or failure-to-pay penalties during that period — or have unpaid assessed amounts — you may be eligible for a refund or abatement.
The ruling may affect individuals, businesses and trusts/estates that paid (or still owe) penalties and interest during the pandemic period, including certain estimated tax penalties.
The IRS will not issue refunds automatically. There may be a limited‑time opportunity to recover penalties and interest paid during the pandemic. Filing a protective claim by July 10, 2026 may be advisable to preserve your right to claim a refund if the case is ultimately resolved favorably. A protective filing does not guarantee a refund, but it keeps the claim open while the issue continues to develop.
We’re actively monitoring this developing area of law. Contact our office at (973) 301-2300 for more information on filing a protective claim.
This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your situation.