Chapter 5 – Why July 10, 2026 May Matter More Than the Final Court Decision

Imagine that two years from now the courts issue a decision that fully embraces the reasoning in Kwong.

Imagine that the ruling confirms that certain taxpayers were entitled to relief they never realized existed.

Imagine that penalties should not have been assessed when they were.

Imagine that certain refund opportunities remained open longer than many people believed.

Imagine that you were one of the people who could have benefited.

Now imagine discovering something else.

Imagine discovering that the deadline for protecting your rights expired before the courts issued that decision.

At that moment, the legal victory may feel less important.

The Natural Instinct Most People Have

If you are like many people, your first instinct may be to wait.

That instinct makes perfect sense.

Most of us are taught not to act until we understand the situation.

Not to make decisions before all the facts are available.

Not to move forward until uncertainty has been reduced.

In most areas of life, that is sound advice.

Tax procedure can be different.

Sometimes you must decide whether to preserve a right before you know whether you will ultimately need it.

That reality feels uncomfortable because it appears backwards.

You may be thinking:

“Why would I file a claim if I do not yet know whether I am entitled to anything?”

That is a reasonable question.

In fact, it is one of the most important questions raised by the entire Kwong discussion.

The answer lies in understanding the difference between a substantive right and a procedural right.

The Difference Between Being Right and Being Too Late

When people think about tax disputes, they usually focus on whether a position is correct.

Did the IRS interpret the law correctly?

Did the taxpayer interpret the law correctly?

Did the court reach the right conclusion?

Those questions matter.

But another question often receives less attention.

Even if you are right, do you still have the procedural ability to benefit from being right?

The tax system contains deadlines.

Lots of them.

Some govern filing returns.

Some govern assessments.

Some govern appeals.

Some govern refund claims.

And once certain deadlines expire, the discussion can change dramatically.

You may still have the better legal argument.

You may still believe a refund should be available.

A court may eventually agree with you.

Yet if the procedural window has closed, the practical outcome may remain unchanged.

That is one of the reasons the National Taxpayer Advocate has repeatedly emphasized awareness rather than certainty.

The goal is not to predict the future.

The goal is to avoid discovering too late that the opportunity to act has already disappeared.

Think About It From Your Perspective

Imagine that you reviewed your transcripts after reading the earlier chapters.

You discovered that a penalty was assessed during the COVID-19 disaster period.

Or perhaps you discovered that withholding existed for a return you never filed.

Or perhaps you found a year that may deserve amendment.

You now know something you did not know before.

Your situation may deserve further review.

But you still face uncertainty.

The IRS disagrees with the Kwong decision.

The appeal is ongoing.

Future courts may not adopt every aspect of the court’s reasoning.

So what do you do?

Do you wait?

Do you act?

Do you preserve your rights?

Do you accept the uncertainty?

Those are deeply personal decisions.

But before making them, it helps to understand the tools available.

The Refund Claim: Asking for Money Back

If you already paid penalties, interest, or other amounts that you believe may ultimately prove refundable, one possible procedural tool is a refund claim.

At its most basic level, a refund claim asks the IRS to return money that has already been paid.

That sounds straightforward.

Yet the decision to file a refund claim is rarely just about paperwork.

It reflects a judgment that a particular issue deserves formal review.

For some people, that may be entirely appropriate.

For others, additional analysis may be necessary before reaching that conclusion.

The important point is not whether a refund claim should be filed.

The important point is understanding that refund rights are generally connected to deadlines.

And deadlines deserve attention before they expire.

The Abatement Request: When the Money Has Not Been Paid

Your situation may look different.

Perhaps the IRS assessed penalties.

Perhaps interest appears on the account.

Perhaps the balance remains unpaid.

If so, the conversation may involve an abatement request rather than a refund claim.

An abatement request typically asks the IRS to remove or reduce an assessed amount.

This distinction is often overlooked.

Yet it can be important because different procedural paths may apply depending on whether the amount has already been paid.

Again, the objective here is not to determine which approach applies to your situation.

The objective is to understand that different facts may lead to different procedural options.

The Tool Designed for Situations Like This

There is a reason the Taxpayer Advocate spent significant time discussing protective claims.

Protective claims exist for situations that involve uncertainty.

And uncertainty is exactly what you are dealing with here.

Imagine that your rights may depend on a legal question that has not yet been answered.

Imagine that the courts are still evaluating that question.

Imagine that waiting for the answer may cause an important deadline to pass.

That is the environment in which protective claims often enter the conversation.

A protective claim is not a prediction.

It is not a guarantee.

It is not a statement that you will ultimately prevail.

It is a way of preserving a position while the underlying legal question remains unresolved.

In other words, it allows you to acknowledge uncertainty without ignoring it.

That is why protective claims have become such a central topic in discussions surrounding Kwong.

Not because everyone should file one.

But because many people are confronting the same dilemma:

“How do I protect my rights while the courts continue deciding whether those rights exist?”

The Most Expensive Mistake May Be Waiting for Certainty

One of the most revealing conversations you can have with yourself is this:

If the courts ultimately rule in favor of taxpayers, what would you wish you had done today?

Would you wish you had gathered your records?

Would you wish you had reviewed your transcripts?

Would you wish you had evaluated your options?

Would you wish you had understood the relevant deadlines?

For many people, the greatest risk is not filing a claim that ultimately proves unnecessary.

The greatest risk is failing to understand the available options until after those options disappear.

That is why the Taxpayer Advocate’s message has been remarkably consistent.

Awareness.

Review.

Evaluation.

Preservation of rights.

Not panic.

Not certainty.

Preparation.

Why the Appeal Does Not Change This Analysis

When the IRS appealed Kwong, many people assumed the discussion would pause.

In reality, the appeal reinforced the importance of the discussion.

The appeal confirms that the law remains unsettled.

It confirms that reasonable people disagree.

It confirms that future court decisions matter.

What it does not do is stop the passage of time.

The appeal and the calendar are operating simultaneously.

One addresses legal questions.

The other addresses procedural deadlines.

And they are not necessarily moving at the same speed.

The Question Beneath Every Other Question

Throughout this guide, you may have found yourself asking:

Do I have a claim?

Should I file something?

Will the courts agree with Kwong?

What will the IRS do?

All of those questions are understandable.

Yet beneath them sits a quieter question.

A more important one.

Have you done enough to understand your situation before important rights expire?

Because that question remains relevant regardless of how the appeal is ultimately resolved.

If the courts reject the broader interpretation, understanding your situation still provides clarity.

If the courts embrace the broader interpretation, understanding your situation may prove even more valuable.

Either way, preparation rarely becomes a wasted effort.

What This Chapter Should Leave You Thinking About

The purpose of this chapter is not to persuade you to file a refund claim.

It is not to persuade you to file a protective claim.

It is not to persuade you to pursue an abatement request.

Those decisions depend on facts, timing, risk tolerance, and individual circumstances.

Instead, this chapter should leave you with a simpler realization.

The biggest issue surrounding Kwong may not be whether the courts ultimately agree with one side or the other.

The biggest issue may be whether you understood your options before the answer arrived.

And that brings us to the final major chapter of this guide.

Because before deciding what any of this means for you, it helps to understand what happens next.

What is the IRS actually arguing?

What could the appellate court do?

What outcomes are possible?

And how should you think about your situation while the legal landscape continues to evolve?

That is where we turn next.