The Tax Refund Deadline Your Clients May Not Know About

Editor’s Note: This article is part of a series. View all the articles in this series here: Tax Refunds and Relief

How often do you get the opportunity to tell your clients that money is falling out of the sky, and you were informed enough to bring them a net?

The recent decision in Kwong v. United States may be the perfect opportunity to break out Ol' Reliable, storm Jellyfish Fields, and shout:

"I'M READY!!!"

While the IRS won't be issuing refunds to the residents of Bikini Bottom, the Kwong decision may create opportunities for some taxpayers to seek relief related to COVID-era filing and payment deadlines.

And that's why this matters to more than just tax professionals.

Many readers are bookkeepers, accountants, controllers, consultants, and tax professionals. You may never file a Form 843 or represent a taxpayer before the IRS. But you may be the first person to recognize that a client should be asking questions before July 10, 2026.

You don't have to understand every technical nuance of Kwong to help your clients. Simply recognizing that a client may need a conversation with their tax professional can be valuable.

What happened in Kwong v United States?

The taxpayer in Kwong wasn't arguing about COVID relief. The dispute involved whether a refund claim had been filed on time.

To answer that question, the court had to determine how Internal Revenue Code Section 7508A applied during the COVID disaster period.

Under the court's interpretation, certain COVID-related disaster relief provisions may have remained in effect until July 10, 2023. That date matters because many taxpayer rights, filing deadlines, and refund statutes are measured from filing and payment deadlines.

The significance of Kwong is not that it created a new penalty abatement program. The significance is that the court concluded certain COVID-era deadlines may have been later than the IRS itself recognized.

And if deadlines move, practitioners must ask an important question: What else moves with them?

If the courts ultimately uphold this interpretation, the impact could extend beyond a single type of penalty or tax return. Practitioners are evaluating everything from failure-to-file and failure-to-pay penalties to payroll tax penalties, estimated tax penalties, interest assessments, and refund claims that may have been denied because a filing was considered late.

In short, if a taxpayer's rights depended on a filing or payment deadline during the COVID relief period, that situation may deserve a second look.

Why does this matter?

Most discussions surrounding Kwong focus on penalties and interest.

That may be only part of the story.

Depending on how the courts ultimately resolve these issues, practitioners may need to evaluate a variety of taxpayer rights tied to filing and payment deadlines, including penalty assessments, interest assessments, payroll tax issues, estimated tax penalties, refund claims, and situations where timing determined the outcome.

For example, practitioners may want to revisit refund denials or other determinations where filing deadlines played a critical role.

Here's the surprising part: The taxpayers most likely to benefit may not be the clients who received the largest penalties. They may be the clients who were previously told they had no remedy at all.

This isn't just an academic discussion happening in courtrooms.

In a recent webinar discussion, tax professionals Eric Green and Kenny Dettman described Kwong and Abdo as potentially one of the most significant IRS penalty and interest opportunities practitioners have seen in years.

The discussion has also reached the National Taxpayer Advocate. In April 2026, the Taxpayer Advocate Service published an article titled, "Tens of Millions of Taxpayers May Be Eligible for Significant Tax Refunds," urging the IRS to address the issue and provide guidance to taxpayers and practitioners.

The phrase "tens of millions" is difficult to ignore. Whether that estimate ultimately proves correct or not, it illustrates the scale of the issue being discussed.

That article reinforces an important point: this is no longer just a theory being discussed among tax controversy professionals. Yet many taxpayers, and many practitioners, still haven't heard about it.

Great. Now what?

The most important takeaway is simple: Don't wait.

Whether you're a tax professional, bookkeeper, accountant, controller, consultant, or other financial professional, now is the time to identify potentially affected clients and start the conversation.

For some firms, that may mean reviewing transcripts and preparing protective claims. For others, it may simply mean encouraging clients to contact their tax professional before the deadline passes. The exact process will vary from firm to firm.

The important thing is recognizing that the July 10, 2026, deadline may arrive long before the legal questions surrounding Kwong are fully resolved. If a client may be affected, now is the time to evaluate their options, not after the deadline has passed.

If you're not a tax representative, you can still help. Ask questions. Start conversations. Encourage clients to contact their tax professional. And if their tax professional isn't familiar with Kwong or isn't evaluating these opportunities, help them find someone who is.

Resources are already emerging to help practitioners and taxpayers evaluate potential opportunities. For example, Kenny Dettman's company, Penalty Back, has developed systems designed to assist with transcript retrieval, analysis, and Form 843 preparation, along with referral relationships for professionals who identify potentially affected taxpayers.

Sometimes the most valuable thing you can do is make sure the right conversation happens before the window closes.

The bottom line

Whether Kwong ultimately survives appeal is not the immediate issue. What matters today is that a federal court has issued a decision that may affect COVID-era filing and payment deadlines, and taxpayers who may be impacted should evaluate their options before July 10, 2026.

As Eric Green noted during a recent discussion on the topic, even if a taxpayer ultimately does not qualify, professionals should still consider alerting clients to the possibility. That message is echoed by the National Taxpayer Advocate's decision to publicly raise awareness of the issue earlier this year.

Clients want to know their professionals are paying attention to important developments, especially when those developments could potentially save them thousands of dollars.

Because once July 10, 2026 passes, the discussion may shift from: "Does my client have a claim?" To "Did anyone tell them in time?"

And that's a question none of us wants our clients asking the day after the deadline.

But wait, there's more...

If you're thinking this article went way beyond penalties and interest, you're right. The more we researched Kwong, the more we found ourselves asking a different question:

What if this isn't really a Kwong story at all?

What if it's a disaster relief story?

In Part 2, we'll look beyond COVID and explore how disaster relief provisions tied to hurricanes, floods, wildfires, and other federally declared disasters may create opportunities many professionals have never considered.

The July 10, 2026, deadline may be today's opportunity. The next one may already be sitting in your client list.