Business and taxpayer advocacy groups have filed a series of amicus briefs urging the Tax Court to rule that interest on pre-pandemic tax debts was automatically suspended during the COVID-19 disaster period.
The case — Wepplo, No. 36722-21 — concerns interest charged on tax deficiencies from 2015, 2016, and 2017. The taxpayers argue that under the 2019 version of IRC § 7508A(d), the entire COVID-19 disaster period running from January 20, 2020, through July 10, 2023, should be disregarded when computing underpayment interest.
The IRS contends the relief applies only to tax acts with deadlines falling within the disaster period. In a rare order issued July 2, the Tax Court invited amicus briefs, noting the question “appears to affect a potentially very large number of taxpayers.”
Plain text of disaster relief statute is central issue
The core argument advanced by the U.S. Chamber of Commerce, the National Taxpayers Union Foundation (NTUF), and Aprio Advisory Group, among others, is that the plain text controls. They contend § 7508A(d) requires the disaster period to be “disregarded in the same manner as a period specified under subsection (a).” That cross-reference, they argue, incorporates all three relief provisions in subsection (a): the timeliness of acts, “the amount of any interest,” and the amount of any credit or refund.
The Chamber, which filed in support of neither party, emphasizes that the interest relief in paragraph (a)(2) is an independent rule, not merely a consequence of the timeliness rule in paragraph (a)(1). The Center for Taxpayer Rights adds a surplusage argument: if interest relief applied only to liabilities due during the disaster period, it would be redundant, because paragraph (a)(1) already prevents interest from accruing on those liabilities.
Paragraph (a)(2), the brief argues, must therefore reach liabilities that first became due before the disaster began. Aprio’s brief adds that Congress could have written a due-date limit into the statute but did not, and that the IRS may not shorten a period Congress made mandatory.
Groups urge no deference to IRS after Loper Bright
Several briefs highlight the interpretive landscape following the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which overturned Chevron deference. The NTUF and Aprio briefs assert that the Tax Court is no longer bound to defer to the IRS’ restrictive reading in Reg. § 301.7508A-1 and must instead determine the “best reading” of the statute itself. Recent post-Loper Bright decisions, the briefs note, have refused to let agencies read ambiguity into the code and resolve it without constraint.
The briefs connect this to the Tax Court’s pre-Loper Bright ruling in Abdo, 162 T.C. 148, which found the relief under § 7508A(d) to be “unambiguously self-executing.” In Abdo, the court had already invalidated part of the same regulation as inconsistent with the statute. The NTUF argues that Treasury lacked any delegated authority to narrow the mandatory relief Congress prescribed, and that a general grant of rulemaking authority cannot sustain a regulation that contradicts the statute. The Chamber contends that, stripped of deference, the court is left only with the statutory text, which ties interest relief to no original due date.
Briefs cite taxpayer impact, press for an administrable rule
Briefs from the Low-Income Taxpayer Clinic at the University of Florida, the Center for Taxpayer Rights, and the Taxpayers Assistance Center (TAC) focused on the disproportionate effect of interest accrual on vulnerable populations. TAC, which also filed in support of neither party, cites National Taxpayer Advocate estimates that tens of millions of taxpayers were assessed interest or penalties during the disaster period, and that 84% of those who recently paid such assessments have adjusted gross incomes under $100,000. With about 78% of Tax Court petitioners self-represented, the brief says, most affected taxpayers cannot litigate the issue themselves.
TAC also pressed for a clear, administrable rule, noting the IRS is already building intake infrastructure for refund claims citing the U.S. Court of Federal Claims’ ruling in Kwong v. United States, 179 Fed. Cl. 382, but lacks a definitive rule to apply. The clinic separately argues that the Department of Education suspended interest on pre-existing student loans during the pandemic, showing comparable relief is feasible.
It also warns that interest on small liabilities can create a “financial trap” for gig-economy workers. TAC urged the court to “write for the reader who will implement the decision at scale.”
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