A recent federal court decision is raising new questions about how tax deadlines were managed during the COVID-19 pandemic and whether some taxpayers could get refunds on interest and penalties from that time. In Kwong v. United States, the US Court of Federal Claims found that existing law might have automatically extended some federal tax deadlines during the national emergency. 

CPA Practice Advisor reports that the ruling explains that Internal Revenue Code Section 7508A(d) says deadlines are suspended “for the duration of the disaster period plus an additional 60 days” during a federally declared disaster. Because the COVID-19 emergency lasted from Jan. 20, 2020, to May 11, 2023, the court found that some deadlines may have been extended to July 10, 2023. 

The court did not limit its interpretation to specific forms or types of taxes, so individual, business, and employment taxes could all be affected. This means interest and penalties charged during that time might be refunded or removed. As Frost Law states, “the ruling raises significant refund and abatement opportunities for affected taxpayers and warrants immediate review of accounts.” 

However, the original tax amount would still need to be paid, and not everyone will qualify. Taxpayers who were charged penalties or underpayment interest during this period may benefit the most.