New COVID Tax Relief Cases Spur Wave of IRS Interest Challenges

Tax attorneys Mary McNulty and Lee Meyercord co-authored a Bloomberg Tax article examining a growing wave of litigation over IRS interest calculations tied to COVID‑19 disaster relief. Their article analyzes how recent decisions, including Abdo v. Commissioner and Kwong v. United States, are prompting taxpayers to argue that Internal Revenue Code Section 7508A(d) required the IRS to suspend underpayment interest – and, in some cases, pay additional overpayment interest – for the full COVID‑19 disaster period plus 60 days, through July 10, 2023. Ms. McNulty and Ms. Meyercord outline how these rulings challenge the IRS' narrower interpretation of pandemic relief, discuss new disputes advancing underpayment and overpayment interest claims, and highlight why taxpayers and practitioners should review interest computations and preserve potential refund claims as case law continues to develop.

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