News Highlights and What They Mean for Chinese Taxpayers
The Taxpayer Advocate Service recently reminded taxpayers that if you believe you may be owed a refund related to COVID-19 relief measures that you have not yet received, it is best to preserve your rights by filing a formal claim for refund or a protective claim for refund. This reminder is especially important for Chinese Americans, particularly those living in Austin—many families and small businesses faced complicated filings and frequently changing policies during the pandemic and may have overlooked recoverable tax amounts.
Editor's Note (Updated July 16, 2026): This article was originally published in May 2026. The COVID-related refund preservation claims discussed here are connected to the Kwong case in the U.S. Court of Federal Claims. The Taxpayer Advocate Service's stated filing deadline of July 10, 2026, has now passed, and the case remains under appeal. Readers who have already filed a formal or protective claim should keep their supporting documentation and await the outcome; those who have not filed should consult a professional to evaluate whether other remedies may be available for their individual case.
What Are Formal Claims and Protective Claims
A formal claim for refund generally refers to requesting a refund through an amended return (for example, Form 1040-X for individuals, or the corresponding amended form for businesses), specifying the particular adjustments and amounts along with supporting evidence. A protective claim for refund, on the other hand, is a declaratory filing submitted when you have not yet fully determined the refundable amount or are waiting on regulations, guidance, or additional information. Its purpose is to preserve your right to claim a refund within the legally allowed time limit, with the specific amount and supporting evidence to be supplemented or corrected later.
Why Do This—Deadlines and Risks
U.S. tax law imposes a statute of limitations, and if you miss the applicable deadline, you may lose the right to pursue a refund. Because COVID-related tax policies (such as certain tax credits or expense adjustments) have changed in both implementation and interpretation over time, taxpayers who fail to act promptly may find themselves unable to recover money that is rightfully theirs due to an expired filing deadline. For this reason, filing a protective claim before the deadline—even while details are still being confirmed—is often the prudent course of action.
Practical Recommendations for Austin Chinese Tax Clients
First, review your tax filings during and after the pandemic (particularly those involving payroll taxes, COVID-related tax credits, or business losses) to determine whether any retroactive adjustments may apply. For specific steps and timing in the filing process, refer to our Chinese Tax Filing Guide and Tax Insights column for explanations of common questions. If you have overseas accounts or income earned abroad, also check your FBAR and other filing obligations—see our FBAR Filing Guide. Second, if you decide to file a claim, prepare supporting documentation such as pay stubs, bank records, and government forms (for example, documentation related to COVID relief); if the amount or legal basis is not yet clear, consider filing a protective claim first and noting in your statement your plan for submitting supplemental materials later.
YZ CPA Note
Please note: 1) Deadline awareness: such claims must be filed within the statutory time limit (the deadline for this round of COVID-related claims was July 10, 2026, which has now passed); for similar situations in the future, determine as early as possible whether a formal or protective claim is needed; 2) Documentation essentials: a protective claim should clearly state the type of relief you are seeking, a preliminary estimate of the amount, and why a protective claim is necessary, along with a plan for submitting supplemental evidence later; 3) Professional evaluation: for complex tax matters or larger amounts, it is advisable to consult with a professional accountant or tax attorney to weigh the pros and cons; 4) Costs and benefits: amending a return or filing a protective claim may involve additional accounting or legal fees, so estimate the potential refund against these costs in advance; 5) Pay special attention to overseas assets and information disclosure obligations to avoid triggering other compliance issues when filing supplemental claims. As an Austin-based Chinese CPA firm, we can help you review your historical filings and determine the best strategy.
If you need professional tax assistance, please visit the YZ CPA Services page or Contact Us.