Important Tax Update: COVID-19 IRS Penalty Relief and Interest Review

A recent federal court case, Kwong v. United States, has created an opportunity for businesses and individuals to seek abatement or refunds of certain penalties and interest assessed during the COVID-19 period (between January 20, 2020, and July 10, 2023). 

While this litigation is currently under appeal by the government and the outcome remains unsettled, important federal deadlines are approaching. Eligible taxpayers may need to file a protective claim for refund before July 10, 2026, to safeguard their rights. 

Could Your Business Secure an IRS Penalty Refund? 

The IRS is not automatically reversing these charges. If you are wondering how to get IRS penalties waived or are looking into COVID tax relief options for past-due taxes, your account history may warrant a professional audit.

Consider whether your business experienced any of the following during the 2020–2023 timeframe:

• Late Filing and Payment Fees: Did you pay an IRS late filing penalty, a failure to pay penalty, or face regular timing-related fines?
• Payroll Tax Issues: Were you assessed an IRS failure to deposit penalty for business payroll or employment taxes?
• Estimated Tax Penalties: Did you receive charges for missed or underpaid quarterly estimated tax obligations?
• Accrued Interest: Were you charged significant IRS interest on top of unpaid taxes, audits, or back-tax assessments

Answering yes to these questions does not guarantee a payout, but it means you should check your IRS tax transcripts to see if a recovery strategy is viable.

Deadlines for Filing a Protective Claim

Reviewing your complete IRS account history and securing official transcripts takes time. To ensure your business meets the necessary federal timelines, please note the following dates:

• Review Submission Deadline: To have our advisory team evaluate your account history for potential relief, please contact us by June 29, 2026.
• Contact PDR CPAs: Call our offices directly at 727-785-4447 to discuss your options, or visit our Contact Page.

Please Note:

This announcement is for informational and educational purposes to keep our clients informed about ongoing federal tax updates. To protect your interests and clearly outline the scope of the review, any formal transcript analysis or filing of a protective claim for refund requires a separate written engagement agreement. If we do not receive your request by June 29, 2026, we will assume you do not wish to initiate a penalty review.