Filing a Claim with the IRS for a Refund or Abatement of Interest and Penalties that Accrued During the COVID-19 Pandemic – Section 7508A(d), Abdo, and Kwong

What is the July 10, 2026 deadline about and do I need to file a claim with the IRS?

June 3, 2026.  In advance of a July 10, 2026 deadline, many tax advisors have been urging clients to file claims for a refund or abatement of interest and certain penalties assessed or paid during the COVID-19 pandemic. This call to action has been echoed by National Taxpayer Advocate Erin Collins in her four-part blog series.

Proponents of filing claims argue that from January 20, 2020 to July 10, 2023, interest and certain penalties should be disregarded based on the interplay between subsection (a) and (d) of section 7508A, as in effect for federally declared disasters after December 20, 2019, and on or before November 15, 2021. This argument extends the holdings by the courts in Abdo v. Commissioner, 162 T.C. 148 (2024), and Kwong v. United States, 179 Fed. Cl. 382 (2025).

Currently, no caselaw holds that interest and certain penalties must be refunded or abated for that period. The argument supporting refund or abatement is based on the following predicates:

1. The timeframe to be disregarded in section 7508A(d)(1) for the COVID-19 pandemic is self-executing;
2. The disregarded period for the COVID-19 pandemic ran from January 20, 2020 (the “earliest incident date”) to July 10, 2023 (the “latest incident date” of May 11, 2023, plus 60 days);
3. The flush language of section 7508A(d)(1) states that this period “shall be disregarded in the same manner” as a period specified under section 7508A(a); and
4. The “period specified under subsection (a)” regards disregarding deadlines and related amounts of interest and certain penalties. This point finds support in the Tax Court’s holding in Abdo that the “‘in the same manner’” language of section 7508A(d) “provides for an unambiguously self-executing postponement period that incorporates all of the acts referenced by section 7508A(a).”

This article summarizes the current state of the law, outlines the government’s position, and identifies practical considerations for taxpayers evaluating whether to file claims.

“Although Congress may not have anticipated a disaster declaration lasting more than three years, the statute’s express text nevertheless applies.”

— Kwong v. U.S., supra

I.  December 20, 2019: Congress Added Subsection (d) to Section 7508A.

Section 7508A(a), enacted in 1997, authorizes the Secretary of the Treasury to disregard certain periods (up to one year) in determining deadlines and related amounts of interest, penalties, additional amounts, and additions to tax for taxpayers affected by a “federally declared disaster” (i.e., defined in section 165(i)(5)(A) as a disaster determined by the president under the Robert T. Stafford Disaster Relief and Emergency Assistance Act).

On December 20, 2019, Congress added a new subsection (d) to section 7508A. As enacted and in effect for disasters declared after December 20, 2019 and before November 15, 2021 (when it was subsequently amended), section 7508A(d)(1) provided that, for any “qualified taxpayer”:

the period—

1. 1. beginning on the earliest incident date specified in the declaration to which the disaster area referred to in paragraph (2) relates, and
   2. ending on the date which is 60 days after the latest incident date so specified,

shall be disregarded in the same manner as a period specified under subsection (a).

A “qualified taxpayer” is generally defined in section 7508A(d)(2) as any taxpayer located in a disaster area.

a. 2019: Six Bills Aimed at Disaster Relief.

Section 7508A(d) was enacted in Public Law 116-94 (in section 205(a) of Division Q (Taxpayer Certainty and Disaster Tax Relief Act of 2019)).

In 2019, six bills were introduced in Congress addressing disaster relief (H.R.2145, H.R.2284, H.R.3301, S.617, S.1133, S.4621). The language enacted in section 7508A(d) is the same as the language in section 305 of H.R. 3301. Although H.R. 3301 was not enacted as a stand-alone bill, the House Ways and Means Committee issued a committee report, H. Rept. 116-379, discussing the bill. The “Explanation of Provision” states:

The provision provides to qualified taxpayers in the case of a Federally declared disaster a mandatory 60-day period that is disregarded in determining whether the acts listed above were performed in the time prescribed; the amount of interest, penalty, additional amount, or addition to tax; and the amount of credit or refund. The 60-day period begins on the earliest incident date specified in the declaration of the relevant disaster and ends on the date which is 60 days after the latest incident date so specified. A disaster area is the geographic area of a Federally declared disaster, which is any disaster subsequently determined by the President to warrant assistance by the Federal government under the Stafford Act.

*             *             *             *             *

The mandatory 60-day period provided under the provision is in addition to, or concurrent with as the case may be, any period of suspension provided by the Secretary.

H. Rept. 116-379, at 99-100 (emphasis added).

II. March 13, 2020: The COVID-19 Disaster Declarations (a) from January 20, 2020 and continuing, (b) then closing effective May 11, 2023

On March 13, 2020, President Trump declared a nationwide emergency under the Stafford Act “beginning January 20, 2020 and continuing.” The declaration was amended to “close effective May 11, 2023.” The COVID-19 declarations are listed by the Federal Emergency Management Agency (FEMA) and published in the Federal Register.

III. June 11, 2021: Section 301.7508A-1(g), the Regulation Under Section 7508A(d), Becomes Final (T.D. 9950).

Section 301.7508A-1(g), the regulation under section 7508A(d), was promulgated in T.D. 9950 on June 11, 2021. In the preamble, the drafters stated that “the intent of the statute is to ensure that relief is provided throughout the disaster period”. 86 Fed. Reg. 31149.

Section 301.7508A-1(g)(1) states that except to acts related to retirement plans, “section 7508A(d) does not apply to postpone any acts.” 86 Fed. Reg. 31150. Section 301.7508A-1(g)(2) states that the time-sensitive acts that are postponed for the mandatory 60-day postponement period are the acts determined to be postponed by the Secretary’s authority under section 7508A(a) or (b). 86 Fed. Reg. 31150.

IV. November 15, 2021: Congress Amended Section 7508A(d) to Alter the Mandatory Extension.

On November 15, 2021, in the Infrastructure Investment and Jobs Act, Congress amended section 7508A(d)(1) to alter the mandatory extension. For disaster declarations declared after November 15, 2021, the mandatory extension under section 7508A(d) ended 60 days after the later of the earliest incident date or the date the declaration was issued. See Pub. L. No. 117-58, § 80501, 135 Stat. 429, 1335

The Joint Committee on Taxation described section 7508A(d) in effect from December 20, 2019 until November 15, 2021 as providing a “mandatory 60-day period” disregarded in determining whether certain acts were performed timely and the amount of any interest, penalty, additional amount, or addition to tax. The Joint Committee also highlighted that the period (including the 60-day extension after the latest incident date) was “in addition to, or concurrent with, any period of suspension provided by the Secretary.” See Joint Committee on Taxation, General Explanation of Tax Legislation Enacted in the 117^th Congress (JCS-1-23) (Dec. 2023), at 142-143.

V. April 2, 2024: Abdo v. Commissioner, 162 T.C. 148 (2024): (a) The 60-day extension in Section 7508A(d) is Self-Executing, and (b) Section 301.7508A-1(g)(1) and (2) Is Invalid to the Extent It Limits Non-Pension Related Acts to Those Postponed by the Secretary’s Exercise of Discretion.

In Abdo v. Commissioner, 162 T.C. 148 (2024), the Tax Court considered section 7508A as enacted in December 2019 in the context of the timeliness of a Tax Court petition. The petition was mailed on March 17, 2020. Absent section 7508A, the deadline to file the petition was March 2, 2020. The IRS moved to dismiss the case because the petition was filed after March 2, 2020. In response, the taxpayers argued that section 7508A(d) and the COVID-19 disaster declaration for their state (Ohio) extended their deadline to petition the Tax Court.

The court held that section 7508A(d) in effect for disasters declared on or after December 20, 2019 to November 15, 2021 unambiguously postponed the period of filing a petition in Tax Court from January 20, 2020 until at least March 20, 2020 (i.e., January 20, 2020, plus 60 days). The court also held that paragraphs (1) and (2) of Regulation section 301.7508A-1(g) were invalid to the extent they limited the non-pension time-sensitive acts to acts determined to be postponed by the Secretary’s exercise of authority under section 7508A(a).

Further, the court held:

• • In the context of a federal disaster declaration containing an incident date, the natural reading of section 7508A(d) is that a qualified taxpayer is automatically entitled to a mandatory extension to file a petition with the Tax Court (which was the act at issue in Abdo). The mandatory language of section 7508A(d) provides the Secretary with “no discretion whatsoever” regarding (1) whether a period is disregarded, (2) how long a period is disregarded, (3) for whom a period is disregarded, and (4) for what purposes a period is disregarded. For a defined person, a defined period “‘shall be disregarded.’” Congress clearly intended for a mandatory postponement period.
  • The “‘in the same manner’” language of section 7508A(d) “provides for an unambiguously self-executing postponement period that incorporates all of the acts referenced by section 7508A(a). For a defined person (a qualified taxpayer), a defined period (beginning on the earliest incident date and ending on the date that is 60 days after the latest incident date) shall be disregarded in the same manner as a period specified under subsection (a) of section 7508A.”

VI. November 25, 2025: Kwong v. United States, 179 Fed. Cl. 382 (2025): Section 7508A(d) Postponed Deadlines From January 20, 2020 to July 10, 2024. “Although Congress may not have anticipated a disaster declaration lasting more than three years, the statute’s express text nevertheless applies.”

In 2020, Mr. Kwong filed requests for abatements of penalties he paid for his 2007, 2010, and 2011 tax years. In September and October 2020, the IRS issued notices of disallowance for these claims. In 2023, Mr. Kwong filed suit seeking refunds of penalties for those years. The government argued that the claims were untimely because under section 6532, Mr. Kwong was required to file a refund claim administratively and initiate litigation no earlier than 6 months after filing the claim and no later than 2 years from the date of mailing of the claim disallowance. Mr. Kwong argued that section 7508A tolled the deadlines from January 20, 2020 through July 10, 2023 to file an administrative claim with the IRS.

The court stated that section 7508A(d) contained “an automatic or ‘mandatory’ extension for any qualified taxpayer in a declared disaster area”, adding:

Under the 2019 version, the period of automatic extension ran from “the earliest incident date specified in the declaration” to “the date which is 60 days after the latest incident date so specified.” … In November 2021, Congress amended the automatic extension of section 7508A, changing the end of the period from “the date which is 60 days after the latest incident date so specified,” to “the date which is 60 days after the later of such earliest incident date… or the date such declaration was issued.” … Thus, the automatic extension, on its face, went from an unlimited period, as long as the disaster was ongoing, to a maximum of 60 days.

(Emphasis in original; internal citations omitted.)

Mr. Kwong argued that July 10, 2023 was the date that was 60 days after the disaster period ended in California, where he resided. Because he filed suit in February 2023, he argued that his suit was timely.

• • The government’s arguments included that the emergency declaration did not initially include a specific end-date, so the postponement period was not extended as long as Mr. Kwong needed.

The court rejected the government’s argument, stating that under the 2019 version of section 7508A(d), an automatic extension ran from the earliest incident date of a disaster declaration to 60 days after the latest incident date. The court noted that a plain meaning of the statute was that an automatic extension ran from the beginning of the disaster declaration through the end of the declared disaster period and until 60 days after the end of the declared disaster period. Further, the court explained that on March13, 2020, the President declared a nationwide emergency, and on March 22, 2020, he declared a major disaster area in California beginning on January 20, 2020 and continuing due to pandemic conditions in California. The pandemic emergency declaration was amended to end on May 11, 2023.

• • A disaster declaration that lasted more than three years was unprecedented and Congress appeared to have intended for the statute to provide routine short-term deadline extensions under section 7508A(d), and in rare instances, further extensions by the Secretary under section 7508A(a) that would last up to a year. Significantly, the court stated: “Although Congress may not have anticipated a disaster declaration lasting more than three years, the statute’s express text nevertheless applies.”
  • The court compared subsection (a), which provided for the Secretary to optionally issue an extension up to one year with the text of subsection (d), which “allows for a potentially longer automatic extension.” The government argued that the extension under (d) could not be longer than the one-year extension under (a). The court rejected the government’s argument, stating:

Nothing in subsection (d) mentions or implies a one-year limit. Under the express text of the statute, the automatic extension lasted until after the end of the disaster declaration, or, in the case of the covid-19 disaster, until July 10, 2023 (60 days after its end date of May 11, 2023).

And nothing in subsection (a) renders the court’s reading of subsection (d) nonsensical. Congress said, and easily could have meant, essentially, that for short-term emergencies, the Secretary was authorized to extend deadlines to up to one year, but for long-term emergencies, there was no further extension available.

• • The government argued that because the initial emergency declaration stated that the declaration was “beginning on January 20, 2020, and continuing,” the declaration contained only one date “specified” and therefore the declaration period ran from January 20, 2020, plus 60 days. The court rejected the government’s argument as unpersuasive, stating that if the declaration meant only January 20, 2020, it would not have said “and continuing.”

• • Congress subsequently amended section 7508A to eliminate the latest incident date, which eliminated the possibility of an indefinite automatic extension when a disaster lasts a long time. The court stated: “That Congress had to amend the statute implies that Congress changed the statute’s meaning; otherwise, Congress could have left the statute’s text as it was.”

• • The regulation (section 301.7508A-1(g)(3)(ii)) misreads the statute by limiting the mandatory extension time in section 7508A(d) by the one-year provision in section 7508A(a) and that, as to the timing question in the case, section 7508A is not ambiguous.

• • The government argued that the court’s reading of the statute confers too much authority to the Federal Emergency Management Administration to suspend the timeliness of tax administration without input from the Secretary of the Treasury or the IRS Commissioner. The court noted that the government’s point was true regardless of whether the automatic postponement was only 60 days or was longer and that the executive branch was supposed to work together. Thus, the government’s concerns that one agency would make policy for another should be worked out within the executive branch.

The court concluded: “In sum, under the 2019 statute, the automatic, or mandatory, extension period began on January 20, 2020, and ended on July 10, 2023, 60 days after the emergency declaration’s latest incident date.”

VII. The Government’s Position: AOD in Abdo, Notice of Appeal in Kwong, Goldstein, Loftin, D’Onofrio, Mayronne, Facebook, Western Digital Corp.

The IRS disagrees with Abdo and Kwong. On May 15, 2026, the United States filed a notice of appeal in Kwong v. United States, supra, to the U.S. Court of Appeals for the Federal Circuit. As its name suggests, a notice of appeal simply notices the appeal and contains no analysis of the government’s argument.

In Internal Revenue Bulletin 2026-23 IRB dated June 1, 2026, the IRS issued an “action on decision” (AOD 2026-01) explaining that it acquiesces only to the court’s opinion in Abdo that the COVID-19 disaster declarations created a mandatory 60-day postponement period from January 20, 2020 to March 20, 2020. The IRS is not acquiescing (1) to the reasoning of the opinion; (2) to the invalidation of Reg. section 301.7508A-1(g)(1) and (2); or (3) to an interpretation that would result in postponement beyond the 60 days provided by the Tax Court in Abdo. The “nonacquiescence” means that the IRS will continue to challenge those holdings.

The government provided more robust argument and analysis in filings in cases pending in U.S. District Courts. First, the government maintains that Abdo and Kwong are not applicable to other courts and, to the extent the cases are persuasive authority, Abdo and Kwong were wrong. See United States v. Goldstein, 8:25-cr-00006 (D. Md. May 15, 2026) (ECF 505); Loftin v. United States of America, 1:25-CV-20646 (S.D. Fla. Apr. 24, 2026) (ECF 37); United States of America v. D’Onofrio, 2:25-cv-2298 (E.D. Pa. Apr. 10, 2026) (ECF 31). As to the merits of the issue, the government’s arguments follow.

1. Government Argument: The earliest incident date of January 20, 2020 was also the latest incident date because “and continuing” in the first disaster declaration was not a date.

The government argues that the language “and continuing” in the first disaster declaration was not a “date” (and therefore not the “latest incident date”). The U.S. Court of Federal Claims specifically rejected this argument in Kwong.

The government is also arguing (a) that the President’s declaration was not primarily about tax and that (b) “continuing” has meaning in the context of federal assistance efforts, which was the focus of the President’s declaration. Thus, the government is arguing that the court’s conclusion in Kwong that January 20, 2020 was not also the “latest incident date” was counter-textual.

For the “latest incident date,” the court in Kwong looked to when FEMA closed the incident report. By looking at FEMA’s administrative action, the court looked beyond the President’s declaration, which is not supported by the text of section 7508A. Thus, January 20, 2020 should have been both the earliest incident date in section 7508A(d)(1)(A) and the “latest incident date” in section 7508A(d)(1)(B), making the end of the disaster-relief period March 20, 2020 (i.e., 60 days after January 20, 2020). Goldstein, supra at 71-80; Loftin, supra, at 14-15.

2. Government Argument: The language “in the same manner” in section 7508A(d) means the duration cannot exceed the 1-year duration in section 7508A(a).

Section 7508A(d)(1) states (in the flush language at the end) that the specified period “shall be disregarded in the same manner as a period specified under subsection (a).” Under subsection (a), “the Secretary may specify a period of up to 1 year that may be disregarded.” Thus, the government’s position is that the postponement period in section 7508A(d) cannot exceed 1 year (and therefore could not have lasted 3.5 years). Loftin, supra at 16.

This argument was rejected in Kwong.

3. Government Argument: The suspension applies only to tax-related acts postponed due to the pandemic.

The suspension of interest and penalties relates only to tax-related acts (such as filing and payment) that were postponed due to the pandemic (meaning that if the deadline to file or pay was postponed due to the pandemic, then the calculation of interest, penalty, and addition to tax for that period was correspondingly disregarded for a certain time). D’Onofrio, supra at 8-9. The government’s argument about deadlines that precede the disaster finds support in Regulation section 301.7508A-1(f) Ex. 2 and Ex. 6.

4. Government Argument: Failing to limit the duration gives FEMA too much authority.

If the disaster-relief period extended for 3.5 years, then FEMA would have unintended authority to impact tax administration. The Treasury Regulation (section 301.7508A-1(g)(3)(ii)(A)) contained a one-year limitation, which the court in Kwong disregarded in holding that the COVID-19 postponement period lasted more than 3.5 years. According to the government, extending the duration of mandatory relief means that FEMA, which has the sole authority to end an open-ended disaster declaration, would effectively recast tax filing and payment deadlines based on considerations unrelated to tax administration. Loftin, supra, at 16.

The court in Kwong rejected this argument, stating that the executive branch is supposed to work together.

Section 7508A has been advanced in other cases.

• In Fleisher v. United States of America, 1:26-cv-01096 (S.D.N.Y. Feb. 9, 2026) (ECF 1), Martin Fleisher and Andrea Bierstein filed a complaint against the government on behalf of a proposed nationwide class of taxpayers seeking overpayment interest. They allege that the interest-limiting exemptions in section 6111(b)(3) and (3) do not apply to determine overpayment interest (vis-à-vis section 7508A(d), which refers to the acts in section 7508A(a), which refers to the acts in section 7508(b)). The government’s answer is due June 22, 2026.
•  A similar proposed class action was filed in the District Court for the Virgin Islands by William O. Perkins, III, under section 7508A and 48 U.S.C. section 1397. Perkins v. United States Virgin Islands, 3:26-cv-00012 (D.V.I. Feb. 27, 2026) (ECF 1).
• In a stipulated decision in Mayronne IV v. Commissioner, No. 1984-24 (T.C. Mar. 13, 2026), the IRS conceded that no underpayment interest would apply for the period beginning April 18, 2022 (the date the tax was due in that case) through July 10, 2023 (the end date of the COVID-19 disaster declaration, plus 60 days). This case appears to have been an outlier that squeaked through the system before the brake was pulled. Anecdotally, it appears that IRS Appeals is taking the position that Kwong/Abdo arguments are challenges to the validity of regulations. IRS Appeals generally does not apply litigation hazards to arguments raised by a taxpayer regarding the validity of Treasury Regulations. IRM 8.1.1.3.1 (01-09-2024) at (5).
• In Meta Platforms, Inc. v. Commissioner, the taxpayer included in its petition that under section 7508A, the period from January 20, 2020 through July 10, 2023 “must be disregarded in determining the amount of any interest, penalty, additional amount, or addition to tax” for its 2017 through 2019 tax years. Dkt. 16081-25 (T.C.) (Doc. 1 at ¶¶ 4.o, 5.o.8, 5.o.9). The IRS moved to dismiss and to strike those portions of the taxpayer’s petition, asserting that the court lacks jurisdiction over the assessment of statutory interest until it enters a decision. Dkt. 16081-25 (T.C.). On May 13th, the IRS filed a reply (and on May 18th, the taxpayer filed a sur-reply. The court has not yet ruled on the motion.
• In Western Digital Corp. v. United States, the taxpayer filed a motion for summary judgment requesting a refund of underpayment interest on its federal income tax for its tax year 2008 that accrued during the COVID-19 pandemic, arguing that the interest was abated by section 7508A. Western Digital Corp. v. United States, 1:26-cv-00215 (Fed. Cl. Apr. 10, 2026) (ECF 11). The government’s response is due on June 8th.

VIII. April 30, 2026 to May 26, 2026: Blogposts by the Taxpayer Advocate Service Telling Taxpayers to File Claims.

The National Taxpayer Advocate, Erin Collins, heads the Taxpayer Advocate Service (TAS). TAS is an independent organization within the IRS. The National Taxpayer Advocate maintains a blog where she posted a series about this issue.

IX. July 10, 2026 Deadline for Filing Refund Claims and Protective Claims.

Under section 6511(a), generally, a taxpayer must file a claim for credit or refund within the later of 3 years of the date that the return was filed or 2 years from the time the tax was paid.

It is critical to apply the facts of your situation to the 3 year/2 year rule of this statute if you are filing a refund claim. A refund claim can be formal, meeting the requirements of Regulation sections 301.6402-2 and 301.6402-3, or informal. A type of informal claim is a “protective” claim, which preserves a taxpayer’s right to claim a refund when the taxpayer’s right to the refund is contingent on future events (such as further development of the caselaw) and may not be determinable until after the limitations period expires.

Informal claims have three components: (1) they provide notice to the Internal Revenue Service of the taxpayer’s claim to a refund, (2) they describe the legal and factual basis for the refund, and (3) they have a written component. AmBase Corp. v. United States, 731 F.3d 109, 118 (2d Cir. 2013). A protective claim does not need to specify the  amount of the requested refund or demand an immediate refund, but the protective claim must identify and describe the contingencies affecting the claim, must be sufficiently clear and definite to alert the IRS as to the essential nature of the claim, and must identify a specific year or years for which the refund is sought. IRM 25.6.1.10.3.2.5 (07-05-2024) at (2). Under Reg. section 301.6402-2(c), a claim (protective or otherwise) is made on Form 843, Claim for Refund and Request for Abatement. After timely filing an initial (protective) claim, a taxpayer may amend the claim so it “relates back” to the prior claim. AmBase Corp., supra.

X. 20% Penalty for Erroneous Refund Claims Absent Reasonable Cause.

Before filing any claim, advisors should analyze the facts and law supporting the claim with an eye toward section 6676, the penalty for an erroneous claim for refund or credit. Under that section, a penalty of 20% can apply to the “excessive amount” (i.e., the disallowed amount of the claim) absent reasonable cause. An IRS internal information module states that the section 6676 penalty can apply to protective claims. Similar language appears absent from the Internal Revenue Manual and more formal statements of the IRS’s position.

“Reasonable cause” includes reasonable reliance on a professional tax advisor as to the treatment under Federal tax law. The advice must be based on all facts and circumstances, must not rely on unreasonable assumptions, and if the validity of a regulation is being challenged, the taxpayer must adequately disclose the position that the regulation is invalid. See Reg. section 1.6664-4(c)(1)(i). The procedures for disclosing a position that the regulation (such as Reg. section 301.7508A-1(g)) is invalid are in Reg. section 1.6662-3(c)(2).

 XI. Other Considerations.

• Litigation Forum. Generally, refund claims rejected by the IRS must be litigated either in a U.S. District Court or the U.S. Court of Federal Claims. Given the holding in Kwong, taxpayers are likely to choose to bring their refund suits in the U.S. Court of Federal Claims, which is a court of national jurisdiction. Thus, if the government loses the appeal of Kwong, the section 7508A door has been opened, with the next question being how wide. The full payment rule under Flora v. United States, 357 U.S. 63 (1958), requires prepayment of interest that is contested in the litigation. See, e.g., Decisionone Holdings Corp. v. United States, 1996 U.S. Claims LEXIS 201 (Cl. Ct. Dec. 3, 1996); Calhoun v. United States, 119 U.S. Dist. LEXIS 569 (S.D. Ind. Jan. 7, 1994).
• Costs. A taxpayer should weigh the cost of an administrative claim and litigation with the amount of interest and penalties at issue. It might be that a taxpayer wants to preserve a claim by filing a protective claim, then wait until the caselaw develops.
• Contingent Fees. Section 10.27(a), (b)(3) of Circular 230 permits a practitioner to charge a contingent fee for services in connection with a claim for refund or credit associated with statutory interest. Under Circular 230, the fee may not be “unconscionable.” Under ABA Model Rule 1.5(a), the fee must not be “unreasonable.” See also DC Bar RPC Rule 1.5(a) and NC RPC Rule 1.5(a).
• Subsequent Disasters. Consult the IRS webpage for “Tax relief in disaster situations for information about subsequent disasters,” but note that for disasters declared after November 15, 2021, the amended section 7508A(d) applies. For Tar Heels, disasters include Tropical Storm Debby (NC-2024-07) and Hurricane Helene (NC-2024-08 and NC-2025-01).

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Taxpayers are receiving mass-marketing communications about filing “Kwong refund claims” and “COVID interest claims.” Some content floating around the internet is comprehensive and insightful; other content is not. The purpose of this article is for readers to understand what is the specific legal issue, what is the current state of the law, what are the government’s arguments, and to provide additional considerations to evaluate the risk and reward of filing a claim. This article should not be construed as legal advice or to provide a determination as to an outcome.

June 3, 2026. Written by Kim Tyson and Karin Gross.