Video Breakdown Series — Part 5 of 5
We’ve covered a lot of ground in this series. Part 1 explained the case and the court’s ruling. Part 2 identified who is most likely to qualify for a refund. Part 3 walked through how to file a protective claim using Form 843. Part 4 explored the broader implications for ERC claimants, taxpayers in collections, and the future of IRS regulatory authority.
In this final installment, we bring it all together into a clear, practical action plan — what you should do right now, in what order, and why the timing matters more than almost anything else in this situation.
The One Thing You Need to Accept First
Before diving into the action steps, there’s a mindset piece that matters: Kwong is not a guaranteed refund. It is a court ruling, currently subject to appeal, that creates a legal argument for refunds that did not previously exist. If the government’s appeal succeeds, those refunds will not materialize.
What Kwong does guarantee — right now, today — is an opportunity to preserve your rights while the legal question gets resolved. Filing a protective claim costs very little. Not filing, and then watching Kwong get upheld while your statute of limitations has expired, costs everything.
So the question isn’t “should I wait and see how the appeal turns out?” The question is “should I spend a small amount of time and money now to preserve my right to potentially recover significant penalties and interest later?” For anyone with meaningful pandemic-era IRS charges, the answer is almost always yes.
Your Complete Kwong Action Plan
Action 1: Pull Your IRS Transcripts for 2019–2022
Log into your IRS online account at IRS.gov and download the Tax Account Transcript for each of the four potentially affected years. If you don’t have online access, request them using Form 4506-T.
Look for failure-to-file penalties, failure-to-pay penalties, underpayment interest, and estimated tax penalties. Note the assessment dates — you want charges that were assessed or collected between January 20, 2020, and July 10, 2023.
If you have a tax professional, ask them to pull and review your transcripts through the professional IRS portal, which often provides more detailed information than the individual online account.
Action 2: Calculate Your Potential Refund Amount
Add up all the penalty and interest charges you identified in the transcripts that fall within the COVID disaster window. This is your preliminary estimate of the refund you could recover under the Kwong theory.
Be thorough. Include penalties from multiple tax years if applicable. Include both the penalty amounts and the interest that accrued on those penalties, since the Kwong ruling’s reasoning covers both.
Action 3: Evaluate Whether to File Independently or Get Professional Help
For potential refunds under $2,000 or so, you may be able to prepare and file Form 843 yourself, citing the Kwong decision and Section 7508A(d). The IRS form is straightforward, and the explanation section can be completed with the information from this series.
For larger amounts — especially anything over $5,000, or any situation involving ERC claims, business taxes, audit-related interest, or an ongoing IRS collection matter — professional assistance is strongly advisable. The technical precision of the claim, the way it’s framed, and how it interacts with other IRS matters on your account all affect the outcome.
At Brightside Tax Relief, we are reviewing client accounts specifically for Kwong eligibility and preparing Form 843 protective claims. We know the technical requirements of a well-constructed claim and how to position it for the best possible outcome.
Action 4: File Form 843 Before July 10, 2026
Prepare your Form 843 with a clear, legally grounded explanation citing the Kwong decision. State explicitly that this is a protective claim filed to preserve your refund rights while the government’s anticipated appeal is pending. Identify the specific tax year, the type of penalty or interest, and the amount you’re claiming for each year.
Mail it via certified mail with a return receipt to the appropriate IRS service center. Keep a complete copy of everything.
If you have charges from multiple tax years, file a separate Form 843 for each year, or work with a professional to determine whether the claims can be combined efficiently.
Action 5: Document and Track Your Claim
After filing, create a simple tracking record: the date you filed, the certified mail tracking number, the amount claimed for each year, and any IRS response you receive. IRS responses on protective claims can take months or even longer — be patient, but stay organized.
If the IRS formally denies your claim, that’s your trigger to appeal to the IRS Office of Appeals. Do not let a denial be the end of the road. The denial is expected. The process of pursuing the claim through appeals — and potentially litigation if Kwong is upheld — is where the real recovery happens for larger amounts.
Action 6: Monitor the Appeal
The government’s appeal of Kwong to the Federal Circuit will take time. Stay informed about the status of the appeal — your tax professional should be tracking this as well. When the Federal Circuit issues its decision, that ruling will significantly affect the strength of your claim and what steps make sense next.
If Kwong is affirmed, aggressively pursue your claim through whatever channel is available. If Kwong is reversed, you’ll know the legal theory didn’t hold, and you can redirect your energy elsewhere. Either way, the protective claim you filed preserves your options.
Frequently Asked Questions About Kwong
Q: What if I already got penalty abatement through first-time abatement or reasonable cause? A: If your penalties were already fully abated through other means, there’s nothing left to recover through Kwong. However, if you received partial abatement and there are remaining penalty or interest charges from the COVID period, those remaining amounts may still be Kwong-eligible.
Q: Does Kwong help if I’m currently in an installment agreement? A: Potentially yes. If a portion of your installment agreement balance consists of penalties or interest assessed during the COVID period, those charges may be invalid under Kwong. A review of your account could reveal that you’re paying more than you legally owe — which affects both the balance and the monthly payment amount.
Q: What if I can’t afford a tax professional right now? A: You can file a protective Form 843 yourself. The key is to do it before the deadline and to include a clear reference to the Kwong decision and Section 7508A(d) in your explanation. Even a self-prepared protective claim preserves your rights. A professional can always take over later if the claim proceeds to the appeals stage.
Q: Is the July 10, 2026 deadline absolute? A: It’s the date that practitioners are using as a practical deadline for many Kwong-based claims, based on a three-year statute of limitations running from the Kwong-extended deadline of July 10, 2023. However, the exact deadline can vary based on when specific penalties were paid and the specific tax year involved. Don’t treat July 10, 2026, as a reason to procrastinate — treat it as a reason to act now.
Q: What if the IRS never responds to my Form 843? A: Under the law, if the IRS doesn’t act on a refund claim within six months, you can treat the failure to act as a denial and proceed to file a refund lawsuit in federal court. Your protective claim filing establishes the starting point of that timeline.
Why This Series Was Written as a Video Breakdown
We created this five-part series in a “video breakdown” format because the Kwong case is the kind of thing that deserves more than a quick take or a one-paragraph summary. It’s a technical legal ruling with real financial implications for millions of Americans — and the way it gets explained matters.
At Brightside Tax Relief, we believe that taxpayers who understand the tools available to them make better decisions and get better outcomes. This series is part of that commitment: breaking down complex tax law into language that real people can understand and act on.
If you’ve found this series useful, share it with anyone you know who paid IRS penalties between 2020 and 2023. The window to act is open right now — but it won’t be forever.
The Bottom Line of the Series
Kwong v. United States is a landmark ruling that has opened a refund opportunity for taxpayers who paid failure-to-file penalties, failure-to-pay penalties, and underpayment interest during the COVID-19 disaster period from January 20, 2020, through July 10, 2023. The ruling is under appeal, which means the outcome isn’t guaranteed — but filing a protective refund claim now is low-risk, potentially high-reward, and time-sensitive.
Pull your transcripts. Calculate your potential claim. File Form 843 before July 10, 2026. And if your situation is complex, get professional help from someone who knows how to position a Kwong claim for the best possible outcome.
At Brightside Tax Relief, that’s exactly what we’re doing for clients right now. Call us at 914-214-9127 or visit brightsidetaxrelief.com. Don’t let this window close without knowing whether it could put money back in your pocket.
The information in this article is for general educational purposes only and does not constitute legal or tax advice. Kwong v. United States is subject to appeal and the legal landscape may change. Consult a qualified tax professional to evaluate your specific situation.
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