We’ve just released a new section inside your Transcripts Dashboard called “Kwong Opportunities.” This feature is designed to help you quickly identify clients who may be eligible for penalty and interest abatement based on the recent court decision in Kwong v. United States.
What Happened in Kwong — and Why You Should Care
In Kwong, the U.S. Court of Federal Claims held that under IRC §7508A, IRS deadlines were effectively suspended during the COVID-19 disaster period — from January 20, 2020 through July 10, 2023.
This is not just a procedural nuance. The court’s reasoning directly challenges the validity of penalties and interest assessed during that time. If deadlines were legally postponed, then the IRS arguably did not have authority to assess penalties tied to missed deadlines, nor interest that accrued as a result of those delays.
In practical terms, this creates a powerful argument that many failure-to-file penalties, failure-to-pay penalties, estimated-tax penalties and related interest assessed during that period may have been improperly assessed.
A Real Opportunity Sitting in Your Clients’ Transcripts
This is not theoretical. These amounts already exist in your clients’ accounts, and in many cases, they are significant.
With the addition of Kwong Opportunities in your Dashboard, you now have the ability to identify these cases quickly and take action. For many firms, this represents a new line of service that can be delivered efficiently using data you already have.
Important: This Position Is Not Yet Fully Adopted by the IRS
It is important to understand that this is an emerging position.
The IRS has not formally adopted the reasoning in Kwong, and the decision may still be appealed. As a result, you should expect some level of resistance. In many cases, claims may require escalation through Appeals, and in certain situations, litigation may be necessary.
That said, this is often how meaningful opportunities develop in tax resolution — before they become widely accepted.
Timing Matters — July 10, 2026 Deadline
For clients where you are pursuing a refund, the statute of limitations is critical.
The general RSED deadline for Kwong claims is July 10, 2026, and claims seeking refunds must be filed before that date.
However, if your client still has outstanding IRS liability, your strategy changes. In those cases, you are not requesting a refund, you are requesting an abatement applied as a reduction of the existing balance. That’s why we added the final column, Total Outstanding Tax Liability, which reflects the combined balance across all open tax years. When viewed this way, RSED is no longer the limiting factor, significantly expanding your opportunity.
How to Use the New “Kwong Opportunities” Section
The new section is now available inside your Transcripts Dashboard, but it requires fresh data to populate.
To activate it, simply go to your Dashboard and click “Update All” under the IRS Tax Liability section. This will refresh all client transcripts and allow the system to identify potential Kwong-related opportunities automatically (including clients with no outstanding balance). Alternatively, this section will populate automatically once you pull updated transcripts for your clients after April 12, 2026.
Export Now Includes Kwong Opportunities
As part of our recent release, your Excel/CSV export functionality has also been enhanced to include this new section. This allows you to sort, filter, and build internal workflows or campaigns around these opportunities with ease.
Strong Form 843 Language (Use This)
When submitting an abatement claim by mail (not by phone), your position should be clear and assertive, you’re not requesting a courtesy; you’re asserting that the assessment was improper under current legal interpretation.
You may use the following language:
Form 843 Explanation Statement:
Taxpayer requests abatement of penalties and all related interest assessed during the period January 20, 2020 through July 10, 2023.
Pursuant to IRC §7508A and the U.S. Court of Federal Claims decision in Kwong v. United States, applicable tax deadlines were suspended during this period due to the federally declared disaster. As a result, the legal due dates for filing and payment were postponed.
Penalties for failure to file and failure to pay, as well as interest attributable to such alleged noncompliance, require the existence of an enforceable due date. Because such due dates were suspended, the statutory basis for these assessments did not exist at the time they were imposed.
Accordingly, the penalties and related interest assessed during this period were improperly assessed and should be fully abated. Taxpayer requests that all such amounts be removed and refunded (or applied to reduce the outstanding account balance).
Join Our Upcoming Webinar with Frost Law
To help you fully understand and capitalize on this opportunity, we are hosting a deep-dive webinar in partnership with Frost Law: Best Practices for Navigating Penalty Abatement due to Kwong Court Decision. This complimentary webinar qualifies for CE/CPE credits for CPAs and EAs.
This session will cover the legal framework behind Kwong, practical filing strategies, and how to approach these cases in real-world scenarios.
Don’t miss this valuable webinar. Register here!
Final Thought
You already have the clients.
You already have the transcripts.
Now you have the insight — and the tool — to act.
This is a time-sensitive opportunity to deliver real value, generate revenue, and position your firm ahead of the curve.
We strongly encourage you to:
- Update your transcripts
- Review your Kwong Opportunities section
- Begin submitting claims
Because opportunities like this don’t stay open forever.
If you don’t see the new section in your Transcript Dashboard, please clear your browser cache and refresh. If you have any questions, feel free to contact our Customer Service team at 954-748-2855.
