In Kwong v. United States, the U.S. Court of Federal Claims ruled that the COVID-19 disaster period, which ran from January 20, 2020, through July 10, 2023, required that federal tax deadlines were automatically extended for that period. Because of the way the Internal Revenue Service (IRS) was computing interest and penalties during that period, many taxpayers were overcharged.
Taxpayers who paid interest on liabilities that were tied to deadlines during that established disaster period may have a strong basis for seeking refunds or abatements. This includes conservation easement investors who settled with the IRS during that period and paid interest during it. Even though this matter isn’t fully resolved in the court system yet, taxpayers should still abide by the set deadlines. One of these is filing a refund or abatement claim by July 10, 2026.
Be aware of potential conflicts of interest
Getting the claim filed prior to the deadline is critical because it may preserve your rights to a refund or abatement. However, you should ensure that you work with a firm that doesn’t have an established conflict of interest in these matters.
Many firms that are advertising Kwong-related services for conservation easement investors previously represented promoters who were pushing these troubled deals. Because of this, it’s critical to find out if the firm you’re considering is in that position.
Another consideration for investors is the fee structure for representation. Some firms are offering flat-fee arrangements, but adding contingency fees to the deal. This extra expense could be costly for investors who are already dealing with significant tax burdens.
At Bomar Law Firm, our conservation easement lawyers are committed to representing only investors. We haven’t represented promoters or the partnerships they were pushing for. We also offer a transparent flat-fee structure without adding extra fees.
Conservation easement investors who believe they have a claim based on Kwong and haven’t filed yet should act quickly to learn their rights. If a claim is appropriate, the deadline is approaching quickly, so getting it filed now is important.
