Potential Refund of IRS Penalties and Interest Assessed During the COVID-19 Pandemic

If you or your business incurred IRS penalties or interest during the COVID-19 pandemic, you may be entitled to a refund of those amounts based on a recent court ruling.

The Court Decision

In Kwong v. United States, the U.S. Court of Federal Claims held that certain filing and payment deadlines were effectively postponed during the federal COVID-19 disaster period from January 20, 2020, through July 10, 2023. As a result, some penalties and interest may have been improperly assessed during the pandemic. Businesses, individuals, estates, and trusts that incurred IRS penalties or interest during this period may qualify for a refund or abatement of those amounts.

Why This Matters

The IRS announced on May 15th it would appeal the opinion, but waiting for the case to be fully resolved may result in a missed opportunity for relief. Filing a protective claim no later than July 10, 2026, can help you avoid losing out on a potential refund or abatement of penalties and interest.

At Wilkins Miller, we are monitoring developments, identifying opportunities, and helping clients evaluate eligibility and feasibility to navigate the protective claim process. If you believe you may be affected, please contact your Wilkins Miller advisor to discuss next steps before the deadline.