IRS Opens Online Portal for Kwong Refund Claims Ahead of Friday Deadline

The U.S. Internal Revenue Service (IRS) has introduced a new online filing option for individual taxpayers seeking refunds for certain interest and penalties paid during the COVID-19 pandemic period, following the federal court decision in the Kwong case. This development offers taxpayers a critical opportunity to electronically submit protective refund claims by Friday, July 10, 2026, thereby safeguarding their potential refund rights.

The Kwong v. United States case, decided by the U.S. Court of Federal Claims in 2025, ruled that the COVID-19 disaster declaration automatically extended filing deadlines for penalties and interest under Section 7508A(d) of the tax code. This implies that penalties and interest assessed between January 20, 2020, and July 10, 2023, may have been improperly charged. The IRS has appealed this interpretation, and the litigation process is ongoing.

The newly launched online portal is exclusively for individual taxpayers filing Kwong-related claims for fully paid interest and penalties. Businesses, however, must continue to submit Form 843, Claim for Refund and Request for Abatement, on paper. Individuals utilizing the online tool are required to have an IRS Online Account and must clearly write “Kwong vs. United States” across the top of their Form 843. This provides a last-minute expedited filing method for those looking to protect their rights.

While the Kwong decision presents a significant opportunity for taxpayers, refunds are not yet guaranteed. Given that the IRS's appeal is still pending, filing a protective claim is crucial to prevent the statute of limitations from expiring, thus preserving taxpayers' rights to a refund should the appellate courts uphold the Kwong ruling. Without a timely protective claim, eligible taxpayers might lose the opportunity to recover these amounts, even if the final court decision is favorable.

This development is part of a broader trend challenging the IRS's interpretation of disaster-related statutory provisions. The Kwong decision follows a similar conclusion reached by the U.S. Tax Court in the earlier case of Abdo v. Commissioner. Both rulings emphasize the supremacy of statutory text over agency guidance, effectively limiting the IRS's discretion in interpreting disaster relief laws. This sets a legal precedent that could have far-reaching implications for future tax practices and administrative decisions.

Tax advisors and law firms are urging potentially eligible taxpayers to promptly file their protective refund claims by the July 10, 2026, deadline, given the limited time remaining. As the appeals process could take several years, these protective claims are considered the only reliable method for taxpayers to secure their rights. Experts recommend that taxpayers review their past tax records and scrutinize any interest and penalties paid for tax years ranging from 2019 through 2022.