Most of us in California have heard the name Kwong by now. Fewer of us have matched it against our actual client files.

That’s the gap I want to close.

The short version: In Kwong v. United States, 179 Fed. Cl. 382 (2025), the Court of Federal Claims held that, under the pre-2021 version of IRC Sec. 7508A(d), the COVID-19 disaster period had to be disregarded in computing certain federal tax deadlines. That disregarded period ran from Jan. 20, 2020, through July 10, 2023.

For some clients, that may reopen refund positions we would otherwise treat as closed. In some fact patterns, the timing analysis may point to July 10, 2026, as a protective-claim date. But that is not a universal deadline, and Kwong did not announce one.

Here’s what you need to know before you start pulling files. In Part 2, we’ll cover the workflow.

Start with the Statute

Pre-2021 Sec. 7508A(d)—the version Abdo and Kwong applied—provided a mandatory postponement running from the earliest incident date in the disaster declaration through 60 days after the latest incident date, applied to the acts listed in Sec. 7508(a)(1)(A) through (F). For a disaster as long as COVID, that meant a multi-year window—which is exactly what gave Kwong its room.

The statute has changed prospectively since then. The 2021 amendment recalibrated how the mandatory period is measured. The endpoint now runs from 60 days after the later of the earliest incident date or the date the declaration was issued, ending the feature that let the period run for the full length of a long disaster. And a 2025 amendment then extended that mandatory period from 60 days to 120 days. Both changes apply only to disasters declared after enactment.

That distinction matters. Kwong got to use the old version because COVID was declared before the amendments took effect.

If a colleague tells you Kwong applies to a current disaster, they are reading the wrong statute.

One more point for practitioners: If Part 2 or your internal analysis gets into the refund lookback rule, note that recent legislation—the Disaster Related Extension of Deadlines Act (P.L. 119-64)—added Sec. 7508A(f), which treats any period disregarded under Sec. 7508A as an extension of time for filing the return for purposes of the Sec. 6511(b)(2)(A) three-year lookback. That extension is what keeps a timely COVID-window claim from being zeroed out by the lookback.

What Abdo Did First

Abdo v. Commissioner, 162 T.C. 148 (2024), answered the threshold question. The Tax Court held that pre-2021 Sec. 7508A(d) was self-executing, meaning the postponement happened automatically without the IRS having to formally invoke it under Sec. 7508A(a). The court also held Treas. Reg. Sec. 301.7508A-1(g)(1) and (2) invalid to the extent those provisions limited the non-pension-related acts covered by the mandatory postponement to acts the Secretary had separately chosen to postpone under Sec. 7508A(a).

What Abdo did not decide was the outer endpoint of the COVID period. Kwong did.

What Kwong Actually Held

Three holdings matter most.

The COVID disregarded period ran through July 10, 2023. Under pre-2021 Sec. 7508A(d), the court calculated the endpoint by taking FEMA’s May 11, 2023, close of the COVID incident period and adding the statutory 60 days. The court also said it did not need to decide whether Sec. 7508A operates as true tolling or as a mandatory postponement. Either way, the suit was timely on those facts.

The taxpayer’s refund suit was timely under Sec. 6532(a)(1). Terry Kwong filed in February 2023 after the IRS sent disallowance notices in September and October 2020. Under the ordinary two-year rule, that suit was years late. The COVID disregarded period brought it back to life for tax years 2007, 2010 and 2011.

The taxpayer still lost the refund. This is where practitioners can get tripped up.

The IRS had taken his 2016 overpayment and applied it against his 2007 liabilities. Under Sec. 6402(a), it could do that. Under Sec. 7422(d), that credit counted as a payment when allowed in 2017. Under Sec. 6511(a), he then had three years from filing or two years from payment to claim a refund. His 2020 filing missed that clock, and the favorable Sec. 6532 ruling did not reach over to rescue it.

The court also upheld his 2016 Sec. 6654 estimated-tax penalty. But the important takeaway is narrower than some summaries suggest: Kwong did not provide relief for that taxpayer’s Sec. 6654 liability, and Sec. 6654 does not contain a broad reasonable-cause exception. Any estimated-tax-penalty issue still requires a separate analysis of the statutory waivers in Sec. 6654(e) and the taxpayer’s specific timing facts.

That separate Sec. 6511 ruling is at least as important operationally as the Sec. 6532 holding—maybe more.

Why We're Focused on July 10, 2026

If the COVID period is disregarded through July 10, 2023, some taxpayers may still have an argument that an otherwise expiring refund-claim period remained open beyond the ordinary date. In some fact patterns, that analysis may point to July 10, 2026, as a protective-claim date.

But that is not a universal deadline, and Kwong did not itself establish July 10, 2026, as a blanket Sec. 6511 deadline.

Three cautions:

• Kwong held that one taxpayer’s Sec. 6532 suit was timely for certain years. It did not bless every Sec. 6511 claim through July 10, 2026.

• Even if a claim clears Sec. 6511(a), the Sec. 6511(b) lookback rules can still cap the recoverable amount.

• Filing dates, payment dates, deemed-payment rules, return due dates, and claim type all matter. Every client is different.

So yes, the July 10, 2026, date may matter. But it matters only after a separate limitations analysis, not as a one-size-fits-all answer.

The Three-clock Problem

Refund timing is not one question. It is three:

• Sec. 6511(a): Is the administrative claim timely?

• Sec. 6511(b): How much is actually recoverable?

• Sec. 6532(a)(1): Is the suit timely after disallowance?

A favorable answer on one does not carry the others. The 2016 piece of Kwong proves the point: the taxpayer won on Sec. 6532 and still lost the refund because Sec. 6511(a) was not satisfied.

If you only run one of these clocks, you will miss something.

Example. Take a claim outside the COVID context: A client files a refund claim within the Sec. 6511(a) window, so the claim is timely. But the tax at issue was paid four years before the claim—outside the three-year Sec. 6511(b) lookback period. The claim clears Sec. 6511(a) and still recovers nothing: the lookback caps the refundable amount at zero. Timely is not the same as collectible. For the COVID-window claims this series is about, P.L. 119-64 extends the Sec. 6511(b)(2)(A) lookback by the disregarded period, so many payments that would otherwise fall outside the window are pulled back in—but the extension is finite, so run the lookback on the actual dates rather than assume every dollar is recoverable.

How Far Does Kwong Reach?

The cleanest application is deadline postponement. If a claim or suit was running through the COVID window, Kwong helps.

The harder question is penalties and interest. There is textual support for broader arguments. Sec. 7508A(a) reaches not just whether acts were timely performed, but also the amount of certain interest, penalties, additions to tax and credits or refunds. That is the hook practitioners are using to explore arguments involving Sec. 6651 failure-to-file and failure-to-pay penalties, plus related interest, where the assessment was computed from a deadline that should have been postponed.

But that is where discipline matters.

Neither Abdo nor Kwong squarely held that all COVID-period Sec. 6651 penalties or related interest must be abated. Abdo was a deficiency-petition timing case. Kwong was a refund-suit timing case. Both support deadline-postponement arguments. Neither settled every downstream penalty or interest consequence.

So, the line to walk is this: arguing that a postponed deadline affected the validity or computation of a particular assessment is the stronger position. Arguing that every COVID-period charge is invalid goes beyond what these cases held.

What California Practitioners Should Assume

California is not going to follow Kwong automatically. Federal treatment and California treatment are separate questions. That means any California-side position needs independent California analysis. Federal reasoning may be informative, but it is not controlling for California purposes.

So, if a file has both federal and California exposure, do not assume the federal answer carries over.

Bottom Line

The real significance of Kwong is not a universal July 10, 2026, deadline. It is that, for some clients, it opens a federal refund position that deserves review before the applicable limitations periods expire.

And the law is still in motion. The government has appealed Kwong to the Federal Circuit, with its opening brief due July 20. That is one more reason the move is to preserve a defensible position before the limitations periods close, not to treat any single date as settled.

That review must be done client by client, with separate attention to Sec. 6511(a), Sec. 6511(b), Sec. 6532, deemed-payment rules and any California-specific issues.

The right question is not whether Kwong matters. Which of your clients still have time to use it?

With an understanding of the legal framework, Part 2 of this two-part series will walk you through a practical workflow that covers prior-year prep file triage, Form 843 narrative sequencing and the California angle.