Kwong V. United States Cites Internal Revenue Code Section 7508A for COVID-19 Refunds

(UNITED STATES) — Taxpayers who paid certain IRS penalties or interest during the COVID-19 pandemic may face a fast-closing refund deadline after the November 2025 court ruling in Kwong v. United States.

The case matters now because refund claims are still controlled by strict limitation periods. For many people, the safest move is to review 2020 through 2023 IRS transcripts right away. That includes immigrants, visa holders, and international filers who were charged penalties on forms such as Form 5471 or Form 5472.

For tax year 2026 returns, filed in 2027, this case does not change normal filing season dates. But it may affect older IRS assessments tied to pandemic-era deadlines.

Deadline summary after Kwong

📅 Deadline Alert: If you paid IRS interest or penalties within the last two years, review those payments now. The refund window may close soon.

What the court decided

In Kwong v. United States, the U.S. Court of Federal Claims held in November 2025 that Section 7508A suspended federal tax deadlines from January 20, 2020, through July 10, 2023.

That is much broader than the IRS’s early pandemic notices. The court rejected the IRS view that relief applied only to narrow, notice-based extensions. The ruling said the statute controls, not limited administrative announcements.

That matters because if a due date was legally postponed, the IRS may not have had authority to charge some:

• Failure-to-file penalties
• Failure-to-pay penalties
• Estimated tax penalties
• Interest
• Information return penalties, including for Forms 5471 and 5472

For immigrants and visa holders, this point is especially important. International filings often trigger steep penalties, even when no tax is due. The IRS discusses alien tax rules in Publication 519 and international filing issues at international taxpayers.

Who may be eligible for refunds

The ruling may help taxpayers in three main groups.

First, it may help people assessed penalties during the postponement window. That includes late filing, late payment, and estimated tax penalties.

Second, it may help taxpayers who paid interest on liabilities due during that period. If the due date should have been postponed, interest may have started too early.

Third, it may help people whose refund claims were denied or treated as late during the COVID period. Sections 6511 and 6532 control many refund deadlines, but Kwong may extend some of those periods.

This can affect:

• F-1 or J-1 holders who filed late international forms
• H-1B or L-1 workers taxed as U.S. residents on worldwide income
• Green card holders assessed penalties on foreign reporting forms
• Dual-status filers who had due dates or claims fall inside the pandemic window

Why the timing is urgent

Refund claims do not stay open indefinitely. In many cases, the lookback period is only two years from payment or three years from filing, under Section 6511.

If you miss that deadline, the refund can be lost even if Kwong supports your position. That is the real deadline issue here.

⚠️ Warning: An extension to file a return does not extend the deadline to pay tax. Separate refund statutes still apply under Sections 6511 and 6532.

Practical steps to take now

Start by pulling IRS account transcripts for tax years affected by the pandemic period. Focus on accounts showing penalty or interest charges from early 2020 through mid-2023.

Next, estimate the dollars involved. Prioritize years with the largest assessments. International penalties can be high, especially for Form 5471 and Form 5472 filings.

Then consider filing a protective refund or abatement claim. Many taxpayers use Form 843, Claim for Refund and Request for Abatement. You can find it through IRS forms.

A practical checklist:

• Request IRS account transcripts
• Identify interest and penalty items
• Match them to due dates within January 20, 2020 to July 10, 2023
• Review whether a Form 843 claim is still timely
• Keep proof of payment dates and IRS notices
• Speak with a tax professional if treaty rules or dual-status issues apply

💡 Tax Tip: If you had both U.S. and foreign reporting duties during 2020 to 2023, review penalty notices line by line. Information return penalties may be the largest refund item.

What remains unsettled

Taxpayers should also know that Kwong is not the final word. The case could be affected by later court action, new IRS guidance, or future settlements. The Abdo matter settled in late 2024 without appeal, and the IRS has not issued full guidance on broad application of Kwong.

That means relief is possible, but not automatic. A filed claim usually puts you in a better position than waiting for the IRS to act on its own.

For normal 2026 filing season planning, keep your regular dates on track: April 15, 2027 for most returns, October 15, 2027 with an extension, and April 15, 2027 for FBAR with an automatic extension to October 15, 2027.

If you paid IRS penalties or interest tied to the COVID period, pull transcripts now, review Form 843, and check whether your claim remains open under Sections 6511 and 6532. International filers should also review Publication 519 and treaty guidance in Publication 901 before filing a claim.

⚠️ Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax situations vary based on individual circumstances. Consult a qualified tax professional or CPA for guidance specific to your situation.