News Background: What Is the Kwong Case Refund?
Recently, the Internal Revenue Service (IRS) issued an important notice: for refund claims related to the "Kwong case," eligible taxpayers can now submit Form 843 through a secure application within their IRS Online Account. This news has attracted widespread attention because it concerns whether many taxpayers who paid late-filing penalties, late-payment penalties, and related interest during the pandemic may have a chance to get that money back.
Editor's Note (Updated July 16, 2026): This article was originally published on July 7, 2026; the filing deadline mentioned in the article (Friday, July 10, 2026) has now passed, and the IRS's appeal in this case is still ongoing. In addition, an earlier version of this article incorrectly described the Kwong case as an international student FICA tax case—this has now been corrected. The Kwong case concerns the refund of pandemic-era penalties and interest and has nothing to do with FICA.
The so-called "Kwong case," formally Kwong v. United States, is a case decided by the Court of Federal Claims in November 2025. The court held that, under Section 7508A(d) of the tax code, the national disaster declaration for COVID-19 automatically postponed certain tax deadlines during the period from January 20, 2020 to July 10, 2023—including the deadline for filing claims for refund of penalties and interest. In other words, taxpayers who were charged penalties and interest by the IRS for late-filed returns or late tax payments during the pandemic may, under this ruling, have an opportunity to reclaim that money. Because the IRS has filed an appeal, taxpayers needed to submit a "protective" refund claim (Form 843, with "Kwong v. United States" noted at the top of the form) by July 10, 2026, in order to preserve their rights before the final ruling is issued.
A Detailed Look at the IRS's New Online Filing Feature
According to the latest IRS guidance, certain taxpayers with an IRS Online Account can now submit Form 843 (Claim for Refund and Request for Abatement) directly through a new secure application. This is a significant administrative improvement, since such claims previously had to be mailed in as paper forms, resulting in long processing times and a higher risk of the forms being lost.
The core purpose of this new feature is to simplify the process by which certain groups can recover taxes. However, there is a critical deadline involved: protective claims related to the Kwong case had to be submitted by Friday, July 10, 2026. This deadline resulted from the combined calculation of the statutory refund claim period and the disaster-relief postponement rules, and missing it left little room for remedy—which is why "racing against the clock" was the most accurate way to describe the situation at the time.
To use this online feature, taxpayers first need to register for an IRS Online Account. Within this account, you can view your tax records, payment history, and this newly added refund claim feature. For members of the Chinese community working in Austin, if you recall paying a late-filing or late-payment penalty to the IRS during the pandemic, it's worth spending ten minutes checking your payment records in your account.
What Does This Mean for Chinese Clients in Austin?
Austin is home to a large Chinese community. Between 2020 and 2021, many members of this community experienced income disruptions, being stranded abroad, changes in immigration status, and other unusual circumstances, and it was not uncommon to file returns or pay taxes late—which in turn led to penalties and interest. Many people at the time simply chose to pay the penalty and move on. If this applies to you, the Kwong case ruling is directly relevant: that penalty and interest may not have been something you should have had to pay in the first place.
It's worth clarifying a point that is easy to confuse: the Kwong case has nothing to do with international students' FICA taxes (Social Security and Medicare taxes). That said, there is a separate, long-standing rule worth knowing about for international students—under Section 3121(b)(19) of the tax code, F-1 students are exempt from FICA taxes as nonresident aliens during their first five years in the United States. If an employer mistakenly withheld this tax during a CPT/OPT internship (check Box 3 and Box 5 of your W-2), you can request a refund using Form 843 and Form 8316. This relief channel is unrelated to the Kwong case and the July 10 deadline, so please don't confuse the two.
In addition, many Chinese clients face not only refund questions but also complex foreign asset reporting requirements. If you have questions about determining your tax residency status or reviewing your past filing records, we recommend checking out our Tax Insights column, which offers more detailed explanations of the differences between nonresident and resident status.
How Do You Know If You Qualify?
Not everyone is affected by this Kwong-related filing opportunity. Generally speaking, the following conditions must be met: you were charged a penalty or interest by the IRS for a late-filed return or late tax payment during the period covered by the pandemic disaster postponement; you filed a Form 843 refund claim for that amount, noting "Kwong v. United States" at the top of the form; and the claim was delivered or submitted before the July 10, 2026 deadline.
This is especially relevant for those who, at the time, simply paid the penalty to put the matter behind them. You may have assumed that money was long gone and unrecoverable. The Kwong case ruling has reopened a narrow window for pursuing a refund. If you're unsure about your tax history, the best approach is to contact a professional accountant to review your situation.
When gathering the relevant documentation, you'll need your IRS account payment records, your tax filing records from that year, correspondence with the IRS, and an itemized breakdown of the penalties and interest charged. While this process may sound tedious, given that the amount at stake could be anywhere from a few hundred to a few thousand dollars, the time invested is worthwhile. For details on the specific filing process and residency status determination, please refer to our Chinese Tax Filing Guide, which includes step-by-step instructions.
YZ CPA Note: Keep an Eye on Further Developments in the Case
YZ CPA would like to remind members of the Chinese community in Austin: tax laws and regulations change frequently, and IRS administrative remedies are typically subject to strict time limits (the Statute of Limitations). The deadline for filing protective claims related to the Kwong case (July 10, 2026) has now passed. If you submitted Form 843 before the deadline, please keep proof of your submission in a safe place and wait patiently for the outcome of the appeal—whether a refund is ultimately issued will depend on the court's ruling.
If you did not submit your claim in time, please do not mail in materials on your own; instead, we recommend reviewing your specific situation with an accountant (such as when and how much in penalties was paid) before determining whether other options may be available. Our team has extensive experience with recovering overpaid taxes, changes in tax status for international students, and foreign asset reporting (as described in our FBAR Filing Guide).
Remember, the IRS will not proactively call to tell you that you overpaid your taxes, nor will it automatically issue you a refund—any related claim must be initiated by the taxpayer. Regularly reviewing your own tax situation is the only way to make sure you don't miss out on money that's rightfully yours.
For professional tax assistance, please visit our YZ CPA Services page or contact us.