Tax Court Pushes Back On Some Kwong-Related COVID Penalty Claims

A U.S. Tax Court order in Bowen v. Commissioner has limited taxpayers' ability to recover COVID-19 pandemic-related penalties and interest. The court assumed federal tax deadlines might have been automatically postponed during the pandemic but ruled that such an extension would not eliminate accuracy-related penalties under section 6662. The taxpayers sought to rely on the Abdo and Kwong cases, which supported automatic postponement periods. However, Judge Ronald L. Buch denied their motion to amend the petition, holding that section 7508A only extends deadlines and does not waive penalties. The court also declined to address interest challenges on jurisdictional grounds. The ruling suggests a significant limitation on pandemic relief arguments, though the government's appeal in Kwong remains pending.