The COVID pandemic was not our typical federally declared disaster. Most federally declared disasters are announced with a beginning and ending period and for a specified geographic area. The COVID disaster was announced with only a beginning date, Jan. 20, 2020, and no ending date. It applied everywhere, with no geographic restrictions.
The IRS typically announces delayed filing and payment dates for federal tax matters arising during these disaster periods. During COVID, Internal Revenue Code Sec. 7508A provided that these tax delays may be for a period up to "the date which is 60 days after the latest incident date so specified."
Without a specified end date for the COVID pandemic, the IRS issued Notice 2020-23 (April 9, 2020) providing relief from tax deadlines falling "on or after April 1, 2020 and before July 15, 2020."
Abdo and Kwong
In Abdo v. Commissioner, 162 T.C. 148 (2024), the Tax Court held that Code Sec. 7508(d) provides a mandatory, self-executing postponement period for disaster relief. It is not discretionary to the IRS. In Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025), the U.S. Court of Federal Claims cited Abdo and held that the COVID disaster period extended from Jan. 20, 2020, to July 10, 2023. President Biden had finally declared the COVID disaster period ended after May 10, 2023. The court added the 60-day period under Code Sec. 7508A to arrive at the July 10, 2023, date.
Since taxpayers have the later of three years from the date when a return was filed or two years from when the tax was paid to make a claim for refund or abatement, July 10, 2026, has become a key focus for taking action with respect to any underpayment of estimated tax penalties, interest or penalties with respect to failure to file or failure to pay taxes, interest on deficiencies, penalties for late-filed international information returns, or other IRS penalties or interest tied to a filing or payment deadline with respect to that period.
Some have even suggested that the logic of the decisions applies where the underlying liability arose before the COVID disaster period but applies to penalties and interest that accrued during the disaster period. The relief would not apply to accuracy-related penalties for larger understatements of tax or valuation misstatements.
The IRS has not acquiesced in the Kwong decision. It is possible that the agency will appeal the decision and continue to oppose requests for abatement. Taxpayers will need to preserve their rights until the issue is fully resolved in the courts.
National Taxpayer Advocate
The National Taxpayer Advocate has recommended that taxpayers file IRS Form 843, "Claim for Refund and Request for Abatement of Tax," by July 10, 2026, suggesting labeling the form "Protective Refund Claim Pursuant to Kwong Case." The Taxpayer Advocate estimates that tens of millions of taxpayers may be entitled to refunds or abatement of interest and penalties over the three-year plus COVID disaster period.
The Taxpayer Advocate is also concerned about disparate treatment where well-informed taxpayers will file protective claims while less-well-informed and perhaps lower-income taxpayers will not be protected. She has encouraged the IRS to provide an extended filing period for Form 843s and for Congress to offer relief to all taxpayers who have paid or are currently obligated to pay interest and penalties related to this period.
Action steps
Tax professionals should review their files for clients potentially affected by having paid or currently owing interest and penalties with respect to this disaster period from Jan. 20, 2020, to July 10, 2023. This may require reviewing IRS transcripts. Then, consulting with clients, they should file separate protective refund claims and requests for abatement. Form 843 must still be filed on paper, although the Taxpayer Advocate has encouraged the IRS to set up a special portal for these filings.
Clients should understand that a protective refund claim is not a guarantee of recovery; it just preserves their rights should a favorable outcome ultimately be determined in the courts.
Tax professionals, while reviewing client records, should also be alert to the possibility that some clients may have a filing deadline even beyond July 10, 2026, depending upon whether a later date is still within three years from when a return was filed or two years from when a tax was paid. For example, with installment agreements, each payment starts its own two-year payment period.
Some affected taxpayers may have matters still in examination, in Appeals, or before the Tax Court. Other taxpayers may have only been assessed a tax deficiency. Some taxpayers may have settled a case with Appeals or with the Tax Court.
The law has since been modified to prevent a similar situation from arising with another COVID-like disaster. Code. Sec. 7508A now provides that the end date is "the date which is 60 days after the later of such earlier incident date … or the date the declaration was issued." However, millions of taxpayers may be potentially entitled to COVID penalty and interest relief and need to preserve that right.
