A recent federal court decision may create an opportunity for some taxpayers to preserve refund claims related to amounts assessed during the COVID-19 disaster period. Because the window to act is limited, it is important to understand how this development may apply to your situation.
What Is the Kwong Case?
In Kwong v. United States (November 2025), the U.S. Court of Federal Claims held that federal tax deadlines during the COVID-19 disaster period were automatically postponed under IRC Section 7508A. The court concluded that this relief extended from January 20, 2020 through July 10, 2023, rather than ending on the shorter timeline previously reflected in IRS guidance.
Who May Be Eligible?
The Kwong decision has the potential to impact a broad range of taxpayers, including individuals, businesses, estates, and trusts that incurred penalties or related interest on tax obligations during the COVID-19 disaster period.
Potential relief may apply to taxpayers who were assessed penalties or interest during this period, including those related to late filing, late payment, estimated tax obligations, employment taxes, excise taxes, and certain information return requirements, as well as interest associated with those amounts.
Refund Claim Deadline – July 10, 2026
Under IRC Section 651, refund claims generally must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever period expires later. For many taxpayers, July 10, 2026, may be an important date for filing a protective refund claim, because Kwong treated July 10, 2023, as the end of the postponed COVID-19 disaster-relief period.
The IRS has appealed the decision, and the issue is not yet finally resolved. Filing a protective claim does not guarantee a refund, but it can preserve your rights while the courts consider the matter. If no claim is filed before the applicable deadline, the opportunity to recover amounts may be lost.
How We Can Help
Our team is actively monitoring developments and assessing potential refund claims for impacted clients. We will be reaching out directly to clients we believe may be affected. If you believe this issue may apply to you, please contact your Saville team member so we can assess your situation, discuss available options, and determine whether filing a protective claim is appropriate.