A panel of tax controversy experts at the 2026 ABA May Tax Meeting on May 8 discussed two court decisions establishing a mandatory, multi-year suspension of many tax deadlines during the COVID-19 pandemic, laying out a range of potential refund claims and approaching action deadlines for practitioners.
The Mandatory Relief Period Explained
The panel’s discussion centered on IRC § 7508A, which grants the IRS authority to postpone tax deadlines for taxpayers affected by federally declared disasters. Following President Trump’s COVID-19 disaster declaration, which established an incident period “beginning on January 20, 2020, and continuing,” the IRS issued discretionary relief in Notice 2020-23 and Notice 2021-21.
The panelists explained that the key provision is IRC § 7508A(d), which created a mandatory postponement period. This period began on the disaster’s earliest incident date, January 20, 2020, and ended 60 days after the latest incident date. The disaster declaration officially ended on May 11, 2023, setting the mandatory relief period end date at July 10, 2023.
The Abdo Decision: Mandatory Postponement Is Automatic
Megan Sullivan, director of the Low-Income Taxpayer Clinic at Legal Aid of Southeast and Central Ohio, who represented the taxpayer in Abdo v. Commissioner, 162 T.C. 148 (2024), reviewed the Tax Court’s ruling for the panel. The court found that the statute provides for an “automatic and mandatory postponement period that incorporates all of the acts referenced by section 7508A(a),” which it described as the “natural reading” of the provision.
The Tax Court rejected the IRS’ argument that its own regulations could limit the scope of this mandatory relief. In doing so, it invalidated Treasury Reg § 301.7508A-1(g)(1) and (2) to the extent it limited the postponed acts to only those the Secretary of the Treasury chose to postpone.
Panelist Mary McNulty, a tax partner at Holland & Knight LLP, explained that the case was resolved in the taxpayers’ favor because the statutory language left no room for ambiguity. The Tax Court, applying Chevron analysis, concluded at Step 1 that Congress had directly spoken to the precise question, making it unnecessary to reach Step 2.
The court found that the statute created a non-discretionary postponement for a wide range of tax actions, including filing petitions, paying taxes, and filing refund claims.
The Kwong Decision: Extending the Relief Window to July 2023
While Abdo established that the relief was automatic, it did not determine the end date of the postponement period. That question was addressed by the U.S. Court of Federal Claims in Kwong v. United States, 179 Fed. Cl. 382 (2025).
The court in Kwong held that the mandatory relief period lasted the entire duration of the disaster, from January 20, 2020, through July 10, 2023. Phillip Colasanto, a tax controversy attorney at Withers Bergman LLP, noted that the court applied the plain meaning of the statute to find the relief ran more than three years. The court rejected the government’s argument that the relief was capped at one year, finding that the phrase “in the same manner” in IRC § 7508A(d) applied to the types of actions that could be delayed, not to the length of the postponement period.
The court also rejected Treasury Reg § 301.7508A-1(g)(3)(ii), finding that the regulation misread the statute by importing the one-year limit from IRC § 7508A(a) into subsection (d)’s separate mandatory provision. Unlike Abdo, which was decided under the Chevron framework, Kwong applied the post-Loper Bright standard of independent judicial judgment and reached the same result.
The Kwong court declined to decide whether the statute operates as tolling or as a postponement period, finding that the taxpayer’s claims were timely under either theory. Colasanto noted that the distinction matters for clients whose limitations periods had already begun running before January 20, 2020: under a tolling theory, time remaining in a limitations period at the start of the mandatory window would resume after July 10, 2023, while under a postponement theory, only deadlines falling within the mandatory window are extended.
Interest, Penalties, and Practitioner Action Items
Sullivan explained that one interpretation of the mandatory relief period would suspend any interest that accrued between January 2020 and July 2023. She noted that the IRS has not broadly adopted that position, though she pointed to Mayronne v. Commissioner, No. 1984-24, an agreed Tax Court decision from March 2026 in which the IRS accepted a suspension of underpayment interest on a 2021 deficiency through July 10, 2023.
Sullivan also pointed to a pending class-action suit before the U.S. District Court for the Southern District of New York, Fleisher v. United States, No. 26-cv-1096, which seeks additional overpayment interest for taxpayers who filed returns during the mandatory disaster relief period. The suit argues that interest suspensions, including the 45-day rule for refunds, should be disregarded during the relief period, entitling taxpayers to interest from their original filing due dates.
For practitioners, the panel identified July 10, 2026, as the approaching deadline to file refund claims for previously unfiled returns from tax years 2019 through 2022. The panel noted that three competing theories govern the available lookback period under IRC § 6511(b)(2), and which theory applies can affect how much of a refund is recoverable.
Sullivan cautioned that IRC § 6676 imposes a 20% penalty on excessive refund claims filed without reasonable basis, so practitioners should evaluate each position carefully before filing.
The panelists encouraged practitioners to screen clients for potential claims by reviewing whether returns were filed or payments were made between January 20, 2020, and July 10, 2023; whether interest or penalties were assessed or paid during that period; and whether any applicable limitations periods remain open.
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