IRS COVID Tax Penalty Refund Lawyer

You May Be Owed a Refund for IRS Penalties Assessed During COVID

Deadline: Most refund and abatement claims under Kwong v. United States must be filed by July 10, 2026. If you or your business received IRS penalties between January 2020 and July 2023, time is running out to act.

A federal court has ruled that the IRS was not legally permitted to assess penalties or interest during the COVID-19 disaster period — January 20, 2020 through July 10, 2023. That means millions of taxpayers and businesses who were penalized during those years may now be entitled to a refund of what they paid, or cancellation of what they still owe.

This isn’t a general IRS forgiveness program. It’s a specific legal claim arising from a specific court ruling: Kwong v. United States, decided by the U.S. Court of Federal Claims. The case held that I.R.C. § 7508A(d) required a mandatory suspension of tax deadlines for the entire COVID disaster period — and that penalties assessed during that window were improperly imposed.

If you received IRS penalties between 2020 and 2023, Attorney Sara Saba will review your records, determine whether you have a viable claim, and file IRS Form 843 on your behalf before the deadline expires.

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Law Office of Sara J. Saba, P.A. | 2650 Biscayne Blvd, Miami, FL | Hablamos Español

What the Kwong Ruling Means for Taxpayers

In Kwong v. United States, the U.S. Court of Federal Claims ruled that Internal Revenue Code § 7508A(d) mandated a suspension of tax filing and payment deadlines for the full duration of the COVID-19 disaster period. That suspension ran from January 20, 2020, through July 10, 2023.

The court held that the IRS lacked the authority to assess penalties or charge interest for obligations falling within that window. This ruling has significant consequences:

• Taxpayers who paid penalties during this period may be entitled to a cash refund.
• Taxpayers who still owe penalties from this period may be entitled to have them cancelled (abated).
• The affected categories span individual filers, small businesses, corporations, partnerships, and international filers.
• Billions of dollars in improperly assessed penalties are potentially at stake.

The legal vehicle for making this claim is IRS Form 843, Claim for Refund and Request for Abatement. Most claims must be filed by July 10, 2026. After that date, the right to recover may be permanently lost.

Which Penalties Are Covered?

The Kwong ruling targets time-based penalties — those tied to the timing of filings, payments, and deposits. If the deadline for your tax obligation fell within the January 2020–July 2023 suspension window, the associated penalty may be refundable or abatable. Here is a breakdown of every affected category:

Individual and Business Filing Penalties

• Failure to File — I.R.C. § 6651(a)(1) — Applies to any tax return due during the suspension window, including individual income, estate, and gift tax returns.
• Failure to Pay — I.R.C. § 6651(a)(2) — Covers taxes due during the window and taxes assessed before 2020 that continued accruing penalties into the suspension period.
• Failure to Deposit — I.R.C. § 6656 — Affects businesses that missed payroll tax and excise tax deposits during this period.
• Estimated Tax Underpayments — I.R.C. §§ 6654 & 6655 — For individuals and corporations that missed quarterly estimated tax installments between 2020 and 2023.
• Underpayment Interest — I.R.C. § 6601 — Interest that accrued on unpaid taxes during the suspension period may also be subject to abatement.

Pass-Through Entity Penalties

• Partnership and S-Corp Late Filing — I.R.C. §§ 6698 & 6699 — Late filing penalties for Forms 1065 and 1120-S are calculated per partner or per shareholder, per month. These accumulate quickly and can be substantial for entities with multiple partners or shareholders.

Information Return Penalties

Businesses that filed or furnished the following forms late during the COVID window may have refundable penalties under I.R.C. §§ 6721 & 6722:

• Form 1099 series (1099-NEC, 1099-MISC, and others)
• Form W-2 (employer wage reporting)
• ACA employer mandate forms — 1095-B and 1095-C

International Reporting Penalties

International compliance penalties often start at $10,000 per violation. The Kwong ruling suggests that deadlines for several high-dollar international forms were suspended through July 2023, raising refund and abatement possibilities for the following:

• Form 5471 — U.S. persons with interests in certain foreign corporations.
• Form 5472 — 25% foreign-owned U.S. corporations or foreign corporations engaged in a U.S. trade or business.
• Form 3520 / 3520-A — Foreign trusts and the receipt of large foreign gifts.
• Form 8865 — Interests in foreign partnerships.
• Form 8938 (FATCA) — Specified foreign financial assets.

Retirement Account and ACA Excise Tax Penalties

• ACA Employer Shared Responsibility Payments (ESRP) — Also known as the “Hammer Penalty,” assessed against employers who failed to offer qualifying health coverage. If the assessment period falls within the window, abatement may be available.
• Retirement Account Excise Taxes — I.R.C. § 4974 — Penalties for missing Required Minimum Distributions (RMDs) from IRAs and qualified plans during the suspension period.

Not sure whether your specific penalty qualifies? Attorney Sara Saba will review your IRS notices at no charge and tell you within the first call whether you have a viable Kwong claim.

The July 10, 2026 Deadline — Why You Cannot Wait

To recover penalties under the Kwong ruling, affected taxpayers must file IRS Form 843, Claim for Refund and Request for Abatement, by July 10, 2026.

This deadline is not an administrative suggestion — it is a hard cutoff tied to the statutory period for filing refund claims. Missing it in most cases eliminates your right to recover, regardless of whether the penalties were lawfully assessed.

The amount at stake varies significantly by taxpayer. For individuals with a single failure-to-file penalty, it may be a few hundred dollars. For businesses with payroll tax deposit penalties, partnership late-filing penalties calculated across multiple partners, or international reporting violations, the refund or abatement could reach tens or hundreds of thousands of dollars.

If you received any IRS penalty notice between January 2020 and July 2023 — paid or unpaid — check your records now. Do not assume your accountant or tax preparer has already handled this. Most have not.

How Attorney Sara Saba Files Your Kwong Claim

When you call our office, we start by pulling your IRS account transcript and reviewing any penalty notices you’ve received. We identify every penalty and interest charge that falls within the Kwong suspension window, calculate the total refund or abatement amount, and determine whether your claim is viable.

If you have a qualifying claim, we prepare IRS Form 843 with a complete legal argument grounded in the Kwong decision and I.R.C. § 7508A(d). We file it directly with the IRS on your behalf and manage all correspondence from that point forward.

You do not need to have already paid the penalty. If you still owe it, we seek abatement of the outstanding balance. If you paid it during the COVID window, we pursue a cash refund.

Sara Saba is admitted to:

• The Florida Bar (since 2004)
• U.S. District Court, Southern District of Florida
• U.S. District Court, Middle District of Florida
• U.S. Court of Appeals for the 11th Circuit

She is also a member of Taxpayers Against Fraud — an organization of attorneys dedicated to holding the government accountable when taxpayer rights are violated. The Kwong ruling is exactly the kind of case this membership reflects.

Frequently Asked Questions

I paid my penalty years ago. Can I still get a refund?

Possibly. If you paid an IRS penalty for an obligation tied to a deadline that fell between January 20, 2020, and July 10, 2023, you may be eligible to recover that payment through a Form 843 refund claim. The key question is whether the penalty type and the tax period it covers fall within the Kwong suspension window. We determine that in the initial review.

I still owe IRS penalties from that period. Can they be cancelled?

Yes — that is what abatement means. If your unpaid penalty falls within the categories covered by the Kwong ruling, we file a Form 843 requesting that the IRS cancel the outstanding balance. You do not have to pay first to make the claim.

My accountant prepared my returns during COVID. Shouldn’t they have handled this?

Most haven’t. The Kwong ruling was decided recently, and many accountants and tax preparers are not yet aware of it or have not proactively reviewed client files for qualifying penalties. This is an attorney-level legal claim, not a routine accounting adjustment. If you believe you may have qualifying penalties, call our office directly.

What if I have penalties for multiple tax years?

Each penalty is evaluated individually. If you have penalties across multiple years that all fall within the January 2020–July 2023 window, we identify and pursue each qualifying claim in a single Form 843 submission where possible, maximizing the total refund or abatement amount.

Does this apply to businesses as well as individuals?

Yes. The Kwong ruling covers a broad range of taxpayers — individuals, small businesses, corporations, S-corps, partnerships, and entities with international filing obligations. Businesses with payroll tax deposit penalties and pass-through entities with per-partner late filing penalties often have the largest potential claims.

How much does it cost to have Sara Saba file my Form 843?

We discuss fees during the free initial consultation. Fees depend on the number and type of penalties involved and the complexity of the filing. There are no surprises — you know the cost before we begin.

What is IRS Form 843?

Form 843 is the IRS’s official form for claiming a refund of taxes, penalties, or interest already paid, or requesting abatement of outstanding penalties. Under the Kwong ruling, it is the required vehicle for asserting that penalties assessed during the COVID suspension window were improperly imposed. It must be filed with proper legal support to be effective — a bare form submission without a supporting argument is unlikely to succeed.

The July 10, 2026 Deadline Is Firm.

Get a Free Review of Your IRS Penalties Today.

Call (305) 904-7049 | Law Office of Sara J. Saba, P.A.
2650 Biscayne Blvd, Miami, FL 33137 | Hablamos Español