Tax tool to identify clients for Form 843 after the Kwong decision

Two recent court cases are giving tax professionals a clearer picture of how disaster relief rules apply to the COVID-19 pandemic. For many, §7508A has felt like a gray area, especially given how long and widespread the pandemic-related disaster declaration lasted. Now, courts are starting to define what that relief really means in practice.

In Abdo v. Commissioner and Kwong v. United States, judges took a closer look at how the IRS handled relief during this period. One key takeaway is that some relief under §7508A may apply automatically, rather than relying on IRS discretion.  In the statute-of-limitations context, Kwong held that the maximum mandatory relief period runs through at least July 10, 2023. While the decisions focus on the timing of claims, they raise important points for practitioners to consider.

Section 7508A allows for the postponement of certain filing and payment deadlines during federally declared disasters. It also raises questions about whether penalties and interest should apply during those periods. 

Kwong, and related developments that followed, have led some practitioners to argue that the IRS should not have assessed penalties and interest during the COVID-19 disaster window. As a result, some are encouraging tax professionals to consider filing protective refund claims on behalf of clients using Form 843, Claim for Refund and Request for Abatement. That said, this issue has not been fully resolved by the courts, so there is still some uncertainty. 

July 10, 2026, has been flagged as a key filing deadline for certain Form 843 claims under the COVID-19 tolling theory. NATP’s partner, Tax Help Software, has a tool to help you quickly identify which clients may benefit from these filings.

This video shows how the tool works: 

If this tool would be useful for your practice, Tax Help Software is offering NATP members a special rate of $249 for a fully loaded Executive License for three months. 

Please note that NATP and Tax Help Software express no view on the correctness of this interpretation.