Kwong vs USA. We win, IRS Losses...for now
A federal court just hammered the IRS, that they shouldn't have assessed penalties during 😷 COVID-19.
Last November, a taxpayer named Kwong, took it to the IRS by filing a petition in tax court which said he didn't owe penalties because of COVID-19.
Here's the history: Donald Trump (love him or hate him) declared the entire country a "Federal Disaster"💥, and legally froze tax deadlines from January 20, 2020, through July 10, 2023.
COVID was sooooo long ago nobody wanted to remember that the stock market was in free fall, the economy was on life support, and DC kept printing money.
And honestly, I can't blame you for wanting to forget about it, which is exactly what the 🏛️IRS did. They forgot about it and assessed penalties anyway.
⚖️ What this means for you, and your penalties
↳🚨Failure-to-file and failure-to-pay penalties that accrued between January 20, 2020, and July 10, 2023, may have been improperly assessed.
↳↩️You may be entitled to a refund or abatement of those amounts, even if you already paid them.
📋 What you need to do
↳🏛️Pull your IRS account transcripts and identify every penalty assessed during that window.
↳🧾File Form 843 (Claim for Refund and Request for Abatement) citing IRC § 7508A(d) and Kwong v. United States.
↳⚠️File even if you expect the IRS to deny it, filing a claim preserves your rights while the case works through appeals.
⏰ The deadline that cannot move
↳📥Most claims must be filed by approximately July 10, 2026.
↳📅That is roughly 90 days away.
↳🛠️This is not a drill.
The fine print is that the IRS is probably taking this to appeals (they just haven't yet.)
Which means if you apply for the refund, they will hold your claim until it goes through the courts.
I'll make sure to keep you up to date on how this goes.