The deadline for taxpayers to file protective refund claims or requests for abatements of interest and penalties imposed during the COVID-19 federally declared disaster period is likely July 10, 2026. Taxpayers should evaluate now whether they should file protective claims for refund or abatement.

Background

IRC Section 7508A(a) generally authorizes the IRS to postpone certain tax-related obligations for affected taxpayers for up to one year in connection with a federally declared disaster. The IRS primarily uses IRC Section 7508A(a) to extend filing due dates for taxpayers located in disaster areas.

In 2019, Congress added IRC Section 7508A(d) to establish a mandatory, self-executing postponement period for tax-related obligations for "qualified taxpayers," beginning on the earliest incident date specified in the applicable disaster declaration and ending 60 days after the latest incident date. Congress, however, further revised IRC Section 7508A(d) in 2021 to substantially shorten the mandatory postponement period for disasters declared after November of 2021. The new subsection ties the end date to 60 days after the later of the earliest incident date or the date the declaration was issued.

In Abdo v. Commissioner, 162 T.C. No. 7 (Apr. 2, 2024), a taxpayer filed a petition with the U.S. Tax Court 15 days after the window for filing would have originally closed. The Tax Court, however, held that the petition was timely because IRC Section 7508A automatically postponed the due date, making the original due date (March 2, 2020) fall within the postponement period. The Tax Court rejected portions of the regulations that attempted to limit the statute's mandatory postponement.

In Kwong v. United States, 179 Fed. Cl. 382 (Nov. 25, 2025), the U.S. Court of Federal Claims held that IRC Section 7508A(d) requires the entire COVID-19 disaster incident period to be disregarded, plus 60 days — resulting in an automatic postponement period beginning January 20, 2020 and ending July 10, 2023. Therefore, a taxpayer's refund suit filed in early 2023 was timely even though the IRS denied the refund claim in late 2020. (The statute of limitations for initiating refund litigation normally expires two years after an IRS denial).

Both courts in Abdo and Kwong applied the 2019 version of IRC Section 7508A(d) and declined to follow the IRS regulatory interpretations that would have imposed additional time limitations. Both courts also identified the resulting COVID-19 postponement period as January 20, 2020 through July 10, 2023 (i.e., 60 days after May 11, 2023). Specifically, the Court of Federal Claims held: "The plain meaning of that statute is that the automatic extension runs from the beginning of the disaster declaration, through the end of the declared disaster period, and until 60 days after the end of the declared disaster period."

Deadline for protective refund claims or requests for abatement

After Congress shortened the mandatory postponement period for disasters declared after November of 2021, taxpayers were confused about the deadline by which they had to file to claim a refund of interest and penalties that were imposed on late tax payments made during COVID-19. Consequently, many taxpayers likely assumed the deadline for filing refund claims had passed. With the holdings in these cases, taxpayers can likely now file for refund claims they previously had thought were time-barred.

Implications

Although Abdo and Kwong arose in procedural postures, their plain-text readings of IRC Section 7508A(d) could support taxpayers' challenge of interest, penalties, and recoverable refunds for certain periods during the COVID-19 postponement period (January 20, 2020 to July 10, 2023). The IRS's position and the ultimate resolution of these issues may continue to evolve through further litigation and administrative guidance.

While the application of IRC Section 7508A continues to be reviewed, taxpayers should consider filing protective claims for refund or protective requests for abatement to preserve their rights. Particularly, IRC Section 7508A may apply to:

• Late-filing and late-payment penalties (e.g., IRC Sections 6651(a)(1) and 6651(a)(2)) computed by reference to due dates within the postponement period
• Estimated tax penalties (e.g., IRC Sections 6654 and 6655) when installment due dates fall within the postponement period
• Interest computations tied to postponed due dates (including underpayment interest and, depending on the facts, potentially overpayment interest computations)
• Information return penalties (including certain international information returns) when the relevant filing due date fell during the postponement period

IRC Section 7508A also may extend due dates for certain refund claims. Taxpayers may wish to reassess whether the COVID-19 postponement period should be disregarded in applying refund-claim-limitation rules (including timing under IRC Section 6511 and related lookback limitations on the amount recoverable).

Next steps

Taxpayers that may have been assessed or paid interest or penalties during the COVID-19 postponement window, or may have refund positions affected by timeliness or lookback limitations, should consult with their tax advisors to determine what impact, if any, these developments may have on current positions, ongoing examinations, or potential refund/abatement claims.