The Court of Federal Claims decided Kwong v. United States, 179 Fed. Cl. 382 (Fed. Cl. 2025), in a way that reopened a calendar most taxpayers and practitioners assumed had closed. The court read former IRC § 7508A(d), the federally declared disaster provision in effect during the COVID-19 period, to automatically postpone filing and payment deadlines through July 10, 2023 for a wide class of returns and obligations the IRS had been treating as untimely. Penalties and interest the IRS assessed off those original (pre-postponement) due dates may therefore have been computed against the wrong reference date.
The National Taxpayer Advocate advised affected taxpayers to preserve refund and abatement rights by filing Form 843 claims, generally by July 10, 2026, and to use a protective claim under Treas. Reg. § 301.6402-2(b)(1) where the exact dollar amount remains unfixed pending further IRS recalculation or controlling legal development. The immediate question is practical: who is affected, what the court actually changed, what a protective claim preserves, and which filing mistakes are most likely to waste the remaining time.
The court’s reading of § 7508A(d)
The court in Kwong read former IRC § 7508A(d) as automatic. The statute provides, in the form in effect during the COVID disaster period, that a federally declared disaster postpones certain filing and payment acts by up to 60 days for any qualified taxpayer in the disaster area. The IRS had taken the position that § 7508A(d) postponements applied only where the agency had issued a specific corresponding notice. The court rejected that reading. Under Kwong‘s interpretation, the postponement runs by operation of statute once the disaster-declaration trigger and the qualified-taxpayer status are present, without regard to whether the IRS later issued a corresponding administrative notice keyed to that taxpayer’s facts.
The practical consequence is that any IRS penalty or interest assessment computed from an original (pre-postponement) due date that falls within the disaster postponement window may have been computed off the wrong baseline. That includes:
- IRC § 6651(a)(1), failure-to-file penalties on returns whose original filing deadline fell inside the postponed window
- IRC § 6651(a)(2), failure-to-pay penalties on tax liabilities whose original payment deadline fell inside the postponed window
- IRC § 6654, underpayment-of-estimated-tax penalties for tax years where the original estimated-tax deadlines sat inside the window
- IRC § 6601, interest assessed on amounts that, under the Kwong reading, were not yet due during the postponed period
The case does not retroactively excuse late filing or late payment in any general sense. It addresses a narrower question: whether the IRS used the right starting date when computing what was late.
Which deadlines moved
The TAS analysis frames the postponement as running through July 10, 2023. That date is not arbitrary. The COVID federal disaster declarations covered every state, with successive amendments and extensions, and the most recent operative declaration window ran out at a point that converts to a July 10, 2023 closing edge under § 7508A(d)’s 60-day extension count. A return or payment obligation whose original due date fell anywhere inside that window is in scope. A return whose original due date fell after July 10, 2023 is not in scope under § 7508A(d) on this theory.
Four boundaries matter. First, the tax-year obligation must have had an original filing or payment deadline inside the COVID postponement window through July 10, 2023. Second, tax years 2018 through 2022 typically have at least one affected deadline. Third, tax year 2022 remains a strong year even though the filing extension ran to October 2023, because the underlying payment and estimated-tax deadlines still sit inside the window. Fourth, tax years 2016 and 2017 were not directly decided in Kwong and fall outside the current primary filing set.
Who may qualify
The eligible population is broader than first read suggests. It includes:
Late-filed individual returns for 2018-2022. Any taxpayer who filed an individual income tax return after the original (pre-postponement) due date, where the IRS assessed § 6651(a)(1) failure-to-file or § 6651(a)(2) failure-to-pay penalties computed off the original date. The transcript will show the assessment as a TC 166 (late-filing penalty) or TC 276 (late-payment penalty).
Tax years with estimated-tax shortfalls. Any year where the IRS assessed a § 6654 penalty (transcript TC 170 or TC 176) and the underlying estimated-tax deadline sat inside the postponement window. The 2018 calendar quarter-end estimated-tax deadlines and the 2019 first-quarter deadline are common examples.
Interest assessments tied to the affected penalty amounts. Any TC 196 interest assessment that compounds from a penalty assessment subject to Kwong may itself be recomputed downward.
Joint-return years where one spouse is no longer available. Joint-return years in 2018 and 2019 remain in scope even where the former spouse is divorced, separated, deported, or otherwise unavailable. The protective claim is filed as a one-spouse joint-year claim with allocation rights reserved, the unavailable-spouse circumstance does not bar the filing.
Taxpayers whose late returns reflect omitted-income corrections. If a taxpayer is amending a 2018-2022 return to add income that was missed on the original, the Kwong protective claim is a separate procedural track that may run alongside the 1040-X. The amendment corrects the underlying income; the protective claim targets the penalties that were computed off the original due date.
Crypto traders with 2018-2022 amendment exposure. A particularly high-incidence population, because late-filed and underpaid returns were common during the period of unstable digital-asset recordkeeping and volatile gains.
What the protective claim preserves
A protective claim under Treas. Reg. § 301.6402-2(b)(1) is a formal claim for refund or abatement filed within the limitations period under IRC § 6511, in cases where the exact dollar amount of the refund or abatement is not yet fixed at the time of filing. The regulation permits the protective claim to identify the grounds for the claim, the tax periods at issue, and the general scope of the relief sought, with quantification deferred until the contingency (here, the Kwong legal posture and any subsequent IRS recomputation) resolves.
A protective claim is not a request to amend the underlying return, not a request for tax-court litigation, not an informal letter, and not a self-executing relief mechanism. The regulation requires the claim to be made on the appropriate IRS form, signed under penalties of perjury, and supported with the substantive elements required for administrative processing.
The Form 843 instructions (Rev. Dec 2024) describe the form as the vehicle for “Claim for Refund and Request for Abatement” of penalties, interest, and additions to tax. The form’s Line 4 type-of-tax indicator (Income) and Line 5 type-of-return indicator (1040) must be checked correctly. Line 7c (reasonable cause or other reason allowed under the law) is the appropriate Line 7 selection for the Kwong posture. Line 6 should identify the IRC sections supporting the protective-claim basis (typically § 6651(a)(1), § 6651(a)(2), and § 6654 depending on which penalties the year carries).
Line 3 needs to be handled carefully. It is for dates of payment of amounts the taxpayer is seeking refund of, not for assessed-but-unpaid amounts. For pure abatement claims of unpaid assessments, the Form 843 instructions direct that Line 3 be left blank or skipped. For mixed protective claims that seek both abatement of unpaid amounts and refund of amounts already paid or credited, Line 3 should still be left blank with Line 8 referring the reader to the attached protective statement. The date columns should not be used for status notation like PROTECTIVE — TBD.
The Line 8 explanation should reference the attached protective statement and identify the regulatory basis (Treas. Reg. § 301.6402-2(b)(1)) and the controlling reasoning (Kwong v. United States). The attached protective statement should set out the grounds for the claim, identify the affected transcript entries by transaction code, and reserve the taxpayer’s right to supplement the claim once the contingency resolves.
What the July 10, 2026 deadline controls
The deadline is the operative limitations boundary for filing the protective claim. Once it passes, the IRC § 6511 statute of limitations on refund and abatement closes for the affected tax periods, and a Kwong recomputation theory that becomes available later through IRS guidance or further litigation cannot reopen what the limitations period has already closed.
The TAS guidance frames the deadline as July 10, 2026, three years from the close of the postponed-deadline window on July 10, 2023. That date is the IRC § 6511(a) two-/three-year limitations boundary as it applies to the postponed window, plus the protective-claim filing convention recognized in Treas. Reg. § 301.6402-2(b)(1). A protective claim filed by July 10, 2026 preserves the right to pursue the substantive relief at any point thereafter as the contingency resolves. A filing made on July 11, 2026 does not.
The deadline is mailing-date controlled under IRC § 7502, the timely-mailing-as-timely-filing rule. A protective claim mailed by certified mail with a postmark of July 10, 2026 (or earlier) is treated as timely filed even if it arrives at the IRS service center after the deadline.
Form 843 is not on the IRS permanent e-signature list under IRM 10.10.1 (Exhibits 10.10.1-1 and 10.10.1-2, as updated October 2023). Both the taxpayer’s signature and the paid preparer’s signature in the Paid Preparer Use Only block must therefore be applied in wet ink. Typed signatures, scanned-image signatures, DocuSign, and other electronic-signature methods are not accepted on a fresh protective claim mailed to a service center. The narrow IRM exception for IRS personnel working person-to-person on an open matter does not apply here. This is a logistics constraint rather than a legal defect, but it has to be planned for.
Joint-year filing when a spouse is unavailable
For 2018 and 2019, many taxpayers filed joint returns and may now find that the former spouse is divorced, separated, deported, or otherwise unavailable. The protective claim does not require both joint-return signatures to be obtained. The filing posture is a one-spouse joint-year claim with allocation rights reserved.
The attached protective statement should identify the year as a joint-return year on the current account transcript, recite the unavailable-spouse circumstance, and reserve the taxpayer’s right to computation of his or her allocable share under applicable IRS joint-return refund procedures (typically IRC § 6015 separation-of-liability allocation principles, though the protective filing does not formally invoke § 6015 unless the substantive claim later requires it). Do not convert the filing posture to married-filing-separately for the protective claim, that is a different position with different substantive consequences and is not what the protective claim is for.
The Form 843 spouse-name and spouse-SSN fields may be left blank if filed-return records cannot be cleanly retrieved. Leaving them blank does not defeat the claim. Do not guess spouse-identifying information.
Submission address
The Form 843 mailing address is the IRS service center where the taxpayer would file the current-year Form 1040. For an individual who files as a resident of Nevada and is not enclosing payment, that is:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0002For an individual who files as a resident of New York and is not enclosing payment, the address is Kansas City, MO 64999-0002. Other states follow the standard Form 1040 where-to-file schedule. The taxpayer’s domicile, not the mailing-service or PMB address shown on the return, controls the service-center routing.
Certified mail with return receipt requested is the conservative method. The certified-mail postmark date controls timely filing under IRC § 7502; the return receipt provides documentation that the service center took delivery.
Recurring procedural failures
Treating the protective claim as informal. A protective claim must satisfy the formal-claim sufficiency requirements of Treas. Reg. § 301.6402-2(b)(2), identification of the taxpayer, the tax periods, the type of tax, the grounds, and the amount or basis of computation (which for a protective claim may be expressed as an estimate or as “to be determined pending resolution of the Kwong issue”). A letter that does not meet these requirements is not a claim; it is correspondence.
Filing on the wrong form. Form 843 is the right form for penalty, interest, and addition-to-tax claims under the Kwong theory. Form 1040-X is the right form for amending the underlying income tax return. The two filings address different reliefs and may run in parallel, but they are not interchangeable. Filing a Form 1040-X to seek penalty abatement under Kwong is procedurally wrong.
Missing the July 10, 2026 deadline by relying on extended timelines. The Form 1040 three-year limitations period under IRC § 6511 does not extend automatically because the IRS is slow to process. The protective claim must be filed by the deadline.
Treating Line 3 as a status field. Already discussed above. The Line 3 columns are for payment dates. Putting TBD or PROTECTIVE in those columns is a clerical defect.
Using electronic signatures. Form 843 is not on the permanent e-signature list. Wet ink is required for fresh protective filings.
Bundling multiple tax years on a single Form 843. Form 843 instructions require a separate form for each tax period or fee year except in narrowly identified circumstances (none of which apply to Kwong protective claims). A five-year Kwong posture (2018-2022) requires five separate Form 843 packets, each with its own attached protective statement and supporting transcripts.
Skipping the supporting transcript. The attached protective statement should identify the affected transcript entries by transaction code and date. The taxpayer should attach the IRS account transcript for the year, or at minimum identify the entries from a recent transcript pull. The IRS service center may process the claim without it, but a complete packet reduces the risk of an Information Document Request loop.
The triage and filing decision
The filing decision turns on four questions. Does the transcript for any tax year 2018-2022 show TC 166, TC 170, TC 176, TC 196, or TC 276 entries assessed at a date that ties back to an original due date inside the COVID disaster window? Is the year free of a separate disqualifying limitations problem such as a closed agreement or fully paid-and-refunded year? Has the taxpayer kept subsequent-year filing and payment obligations current, or is the matter otherwise ready to file? Can the taxpayer or representative produce wet-ink signatures and certified mail in time to postmark by July 10, 2026?
If all four answers are aligned for a given tax year, that year is ready for a protective Form 843 filing. The substantive recomputation can wait, the protective filing’s job is to preserve the right while the Kwong issue and any subsequent IRS administrative guidance resolve.
The remaining work, quantifying the actual recomputation, pursuing the refund or abatement against the assessed amounts, responding to any IRS denial or partial allowance, happens after the protective filing is in. The deadline is what is non-negotiable.
July 10, 2026 is the operative date. Once transcript pulls, joint-return-year analysis, wet-ink signature logistics, and certified-mail transit are accounted for, the filing calendar should be treated as a concrete procedural deadline rather than a last-week task.
Article authority anchors: Kwong v. United States, 179 Fed. Cl. 382 (Fed. Cl. 2025); IRC §§ 7508A(d), 6402, 6511, 6601, 6651, 6654, 7502; Treas. Reg. § 301.6402-2; Form 843 instructions (Rev. Dec 2024); IRM 21.5.3 (claim processing); IRM 10.10.1 (e-signature program, Form 843 not on permanent list as of October 2023 update); National Taxpayer Advocate blog Parts I and III on COVID-era disaster-relief refund claims (April 2026, May 2026).