A recent court ruling may provide an opportunity to seek refunds or abatement of interest and penalties that accrued during the COVID-19 pandemic. Wiggam Law can help you claim refunds and abatements.
Millions of taxpayers entitled to billions in refunds
The court ruling in Kwong v. United States provides an argument that the IRS should not have assessed interest or penalties from early 2020 to mid-2023. The IRS is still fighting back in court, but with billions on the line, taxpayers don't have time to wait. You must file a protective claim by the deadline that applies to your case or risk losing the opportunity.
The expert tax attorneys at Wiggam Law are ready to help – contact us for a free case review today.
When's the deadline for claiming a refund of COVID-era interest and penalties?
The deadline for your case depends on when you paid the liability or made a § 6603 tax deposit. You have two years from the payment date to file a refund claim or the later of two years after the payment or assessment date if you made a deposit. If you have outstanding liabilities, that timer may not have started yet.
When you contact us for a free case review, we'll carefully review your situation to determine your deadline.
Refund deadlines are extremely strict, with no room for extensions. To protect your claim, you need to act now.
For taxpayers who paid their liabilities more than two years ago, the Kwong refund deadline has already passed, but depending on the specifics of your case, you may still have options. We'll help you assess the situation.
Who may qualify for refunds based on Kwong v. United States?
The Federal Court's ruling in Kwong v. United States, by extension, creates an argument that the IRS should not have assessed interest and penalties from January 20, 2020, to July 10, 2023. The decision means refunds may be available to taxpayers who incurred:
- Late filing or payment penalties on 2019 to 2022 income, trust, or estate tax returns
- Penalties on payroll tax returns or deposits due between those dates
- Estimated tax penalties assessed between those dates
- Accuracy-related penalties on tax assessed during that time frame
- Interest on underpayments or penalties assessed during the COVID relief period
- Interest or penalties assessed during COVID on tax debts incurred prior to January 20, 2020
Taxpayers who incurred penalties on late international informational returns (e.g., 5471 penalties) may also qualify for relief. Learn more about who qualifies for refunds of COVID-era interest and penalties.
How to protect your right to COVID interest and penalty refunds
The IRS has appealed and stated that it will not comply with the court's refund ruling until the appeal is complete. To protect your right to a refund, you must act now. If you incurred penalties or interest during the 3.5-year disaster relief period, here's what you need to do:
Consult with experienced legal counsel
Reach out to an experienced tax attorney to review your legal case. Whether there are tens of thousands or millions on the line, you need a legal team that's deeply experienced with the intersection of tax law, protective refund claims, and emerging case law.
Review your refund eligibility
You are likely entitled to a refund if you paid or incurred any IRS penalties for filing or paying late between January 20, 2020, and July 10, 2023, or if you incurred interest on any underpayments or penalties during this time frame. But it depends on the timing.
Act before the deadline
Being proactive is critical with Kwong refund claims. The deadline for most taxpayers is two years after you paid the tax or penalty. If you made a deposit, the deadline is two years after the latter of the deposit or assessment date.
What to expect when claiming an IRS refund
The IRS routinely abates penalties when taxpayers have reasonable cause, qualify for first-time abatement, or the penalties were assessed incorrectly. But even in cases of IRS error, there's a statute of limitations on refund claims – that's why it's critical to reach out promptly.
Here's what to expect when you contact the tax attorneys at Wiggam Law:
Case evaluation: A deep dive into the specifics of your case, including which penalties and interest were assessed and when.
Strategy development: Customized strategy based on your unique case factors, driven by an experienced team of attorneys.
Refund claim: Filing a refund or abatement claim so you can recoup interest and penalties that should not have been charged to your account.
Negotiation: Presenting strong narratives, invoking Kwong, P.L. 119-64, and leveraging all other arguments relevant to your case.
Resolution: The IRS may agree with all of the claim, some of it, or none of it. As needed, we'll appeal and help you get the best resolution possible for your case.
Refund claims are often time-intensive, but they can be even more time-consuming when you're dealing with pending case law. Unfortunately, while appeals buys the IRS more time to comply, it does not extend the timeline for taxpayers. You still must file your refund claim by the deadline to secure your right to relief.
Here are more details on what to expect when you file a refund claim.
Why work with the attorneys at Wiggam Law
Wiggam Law brings decades of combined experience, customized legal strategies, and a resolute commitment to client success to every single case we handle. Additional benefits of working with our team include:
- Transparency: You know exactly how pricing works, why we recommend certain strategies, and the most likely case outcomes in your situation.
- Communication: We keep you updated every step of the way. You'll know exactly what's happening with your case, and why.
- Attorney representation: A tax attorney represents your interests, negotiating with the IRS on your behalf. You work directly with an attorney, not a sales rep.
- Custom strategies: We don't use canned approaches. We customize all strategies based on the specifics of your case and your personal financial goals.
- Team-based approach: You'll have your point of contact leading the way, while also knowing that a full team of experts is shaping the strategy.
Our tax attorneys are always ready for a challenge, and you need us in your corner, especially if you're dealing with high penalties and interest related to corporate underpayments, high individual tax liabilities, payroll tax penalties, syndicated conservation easement (SCE) audits, or any other complex tax concerns.
Don't wait – contact us for a free case review today.
Kwong Refunds FAQs
What is a Kwong refund?
It's a refund of interest or penalties assessed between January 20, 2020, and July 10, 2023, based on a court ruling in Kwong v. United States, which created an argument that the IRS should not have applied interest or penalties between those dates.
Where is the best place to get help with a Kwong refund?
Work with a legal team focused on tax resolution and experienced with cases involving unsettled law. Avoid contacting "refund mills," which often pop up to "help" taxpayers with these types of claims. You need to be represented by a company with years of experience, not someone who just built a website to generate business around a limited-time opportunity.
Why would the IRS give out refunds for COVID-era interest and penalties?
An amendment to the tax code, as applied in January 2020, provides that the IRS must disregard certain deadlines, including suspending interest and penalties, for taxpayers in federally declared disaster areas, and for 60 days after it ends. All 50 states were part of a federally declared disaster area due to COVID from January 20, 2020, to May 11, 2023, but the IRS applied billions in interest penalties during this time frame, plus the 60-day period after it ended, through July 10, 2023. A federal claims court has ruled that the IRS was required to disregard, or extend, these deadlines from January 20, 2020, through July 10, 2023, but the IRS has appealed.
Which penalties assessed during COVID qualify for refunds?
Penalties eligible for refunds may include failure-to-file, failure-to-pay, failure-to-deposit, and estimated tax penalties. Accuracy-related penalties and penalties for failure to file international information returns may also qualify for relief.
What's the July 10, 2026, deadline mean?
The July 10, 2026, deadline is based on the IRC's refund statute of limitations. Taxpayers have three years from a return's original due date to apply for a refund (or if later, two years after paying). If deadlines were suspended during COVID, all returns due between January 20, 2020, and July 10, 2023, move to July 10, 2023. That makes the refund deadline July 10, 2026, based on the three-year timeline.
As indicated above, the refund statute also allows a deadline of two years after payment if that's later than the three-year deadline. Cases initiated after July 2026 rely on the two-year rule.
What if I miss the July 10, 2026 COVID refund deadline?
Then, you need to look at whether you qualify for a refund based on the two-year payment deadline. If your state was subject to other federally declared natural disasters, such as hurricanes and tropical storms, you may still be eligible to request a refund. Talk with an attorney to identify the relevant deadlines and the best strategy for your situation.
Why should SCE investors apply for a Kwong refund?
Many SCE investors incurred substantial interest during the COVID pandemic. Investors with a $100,000 liability would have incurred about $16,000 in interest during this 3.5-year period, while those with a million-dollar liability incurred about $160,000 in interest.
Secure Your Right to Kwong Refunds – Contact Us Today
You may deserve a refund, but the IRS isn't going to hand them out freely. You must get your protective claim in before the deadline that applies to your situation.
Contact us at Wiggam Law to set up a free case review today. We'll help you understand if this is the right option for your case and make a plan to mobilize quickly.
Learn More About Kwong Refunds for COVID Interest & Penalties
The Kwong case looks at the timeline for mandated IRS relief during federally declared disasters. It retroactively has a significant impact on interest and penalties assessed during COVID.
SCE Investors & Kwong Refunds
SCE investors may be eligible for refunds or abatements of certain interest and penalties that should not have run through the COVID pandemic. Three years of daily compounding offers the chance for significant savings.
Why You Should File an Interest Claim
If the IRS assessed interest on your account during COVID, you may be eligible for a refund or abatement for those amounts.