Billions in COVID-Era Tax Refunds Are at Stake as U.S. Appeals

Tax attorney Mary McNulty was cited in a Bloomberg Tax article exploring what's at stake in the government's appeal of Kwong v. United States, a 2025 decision concluding that tax filing and payment deadlines were postponed throughout the entirety of the federal COVID-19 disaster declaration. In 2019, Congress amended Section 7508A of the Internal Revenue Code to automatically postpone tax deadlines during federally declared disasters; when applying the statute to the pandemic, the IRS interpreted it narrowly, contending the deadlines were pushed back 60 days after the start of the declared disaster. The court in Kwong disagreed, however, issuing a ruling that spurred other cases whose collective outcomes could lead to a wave of refund claims amounting to billions of dollars. Ms. McNulty pointed out a factor going against the government in legislative intent: Congress has revisited this issue multiple times in the past six years to tweak deadline relief, but none of the changes applied retroactively.

"If they did that, that makes me think that they could have done it retroactively at that point, but they chose not to," she remarked.

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