A recent U.S. Tax Court order is causing a stir, with some practitioners suggesting it could significantly limit taxpayers’ ability to recover penalties and interest assessed during the COVID-19 pandemic. But the fallout may not be quite that simple.

In Bowen v. Commissioner, the court did not decide whether federal tax deadlines were automatically postponed during the COVID-19 disaster period. Instead, it assumed that they might have been—and ruled that the extension would not wipe out the accuracy-related penalties at issue.

The taxpayers, Suzanne and Kenton Bowen, filed a petition in Tax Court in 2024 after the IRS assessed additional tax for 2016 along with a 20% accuracy-related penalty, alleging that the return reflected negligence or disregard of the tax rules.

A notice of deficiency sets out the IRS's determination that the taxpayer owes additional tax and often includes any proposed penalties. After the notice is mailed, the taxpayer generally has 90 days (150 days if addressed outside the United States) to file a petition with the U.S. Tax Court. Filing a timely petition allows the taxpayer to have the dispute heard by the Tax Court before paying the proposed deficiency—which is what happened here.

Suzanne Bowen was later dismissed from the case for lack of jurisdiction. The IRS had moved to dismiss her on the grounds that it had not issued a notice of deficiency—or made another determination concerning her 2016 tax year—that would allow her to invoke the Tax Court’s jurisdiction.

That left Kenton Bowen as the petitioner in the original case (the case is part of a group of four related cases involving Bowen). Three of the notices of deficiency included accuracy-related penalties. In the fourth case, the IRS added the penalty by amending its answer. The cases have generated several orders, but only one directly addresses the taxpayers’ COVID-19 relief argument.

The Pandemic Relief Argument

On July 17, 2026, the petitioners filed a motion asking for permission to amend the petition. They wanted to add an argument that they were not liable for penalties and interest assessed during the COVID-19 disaster period. Their theory relied principally on two cases: Abdo v. Commissioner and Kwong v. United States.

In Abdo, decided in 2024, the Tax Court concluded that the mandatory disaster relief provision then found in section 7508A(d) of........

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