May 20, 2026

You Might Be Eligible for Significant Refunds of Prior Penalties & Interest You Have Previously Paid

Other than sending out my annual organizer, I never communicate with my entire client base via letter. This is a special circumstance that demands immediate response.  A recent Federal Court of Claims Ruling might open the door to significant refunds of past paid penalties and interest. To secure your refund (if you have one coming), we must file certain documents with the IRS by July 10th, 2026.  Immediate action is necessary! (I hate that this sounds like a scam letter requiring “immediate action”, but immediate action is required!)

This information is a lot to take in. I would not ask you to read it if the stakes were not so high. For your own protection, I need you to read the whole stinking thing.

The ruling potentially could refund a lot of money back to my clients.  However, it is an administrative nightmare for our office with a rigid, non-negotiable deadline.  Over the covered period (2020-2023), we have filed thousands of tax returns.  Researching the penalties assessed on clients that want to proceed with claims will constitute the most difficult logistical feat my company has ever undertaken.  With that in mind, please know that this letter represents everything we currently understand about the situation.  PLEASE DO NOT CALL OR EMAIL US FOR MORE INFORMATION.  We have no additional answers and, most importantly, we simply do not have the manpower to field hundreds of calls and emails, get the research done, the forms filed and complete the normal return workload we carry this time of year. If you have questions, I advise you to do some quick checking online.  There is plenty of accurate information on the case and its background.

Thumbnail Background: Due to the COVID-19 pandemic, the federal government declared a national disaster between January 20th, 2020, and July 10th, 2023.  During that time, the IRS announced extended filing and payment deadlines. However, beyond those extended deadlines, penalties and interest were assessed.  Last month, a federal court ruled that the IRS should not have charged those penalties and interest during the covered period. Holy Smokes!  The court further ruled (or it can be inferred) that any assessed penalties (and the interest charged on them) could petition to abate those penalties.  However, the statute of limitations to file that abatement is July 10th, 2026.  Folks, this is an enormous amount of money impacting an enormous amount of taxpayers!

Does This Ruling Impact You?  There are some general hallmarks of clients this ruling will likely most benefit.  Consider the following questions related to the covered period for yourself, a trust you oversee or your business:

1. Do you normally file after April 15th and owe taxes when you file?
2. Have you filed after October 15th and owed taxes?
3. Regardless of when you file, do you normally owe more than $3000?
4. Were you in an installment agreement to pay back taxes during the covered period?
5. If you own a business, have you been assessed payroll deposit penalties – for late filing or late payment?
6. If you own a business that files a separate income tax return, have you been assessed a late filing penalty for filing the business return after its deadline?

If you answered “no” to all questions, you likely will not benefit from filing abatements.  You may stop reading now and go back to your regular life.

If you answered “yes” to any of these questions, let’s keep going.

Is it Worth It?  My office will charge a non-refundable flat fee of $250 for the administrative and research work along with the filings of the abatement forms.  In addition, we will charge a 25% contingency fee due when/if the IRS refunds your money or otherwise credits the abatement (interest included) to your account.  I think your best guide is to go back to the above questions.  In considering those questions, keep in mind that we are talking about multiple years of returns and you might have several types of penalties that might have been assessed – so think of the items below in concert rather than individually:

1. If you normally file after April 15th and do not owe much, there probably are not a lot of penalties and interest to abate.
2. If you filed after the October 15th deadline, those penalties are much more severe – a lower balance owed still might render a sizeable amount of penalties.
3. If you have a modest bill when you file, there will be a lower amount of estimated tax payment penalties and (if you file after April 15th), a modest amount of late payment penalties and interest. This is a coin toss.
4. If you were in an installment agreement during the covered period, you have been paying penalties and interest. I would file the abatement forms.
5. If you incurred payroll tax penalties, they can be severe. I would think filing the abatement form would be a good idea.
6. If you incurred late filing penalties for a business return, it depends how late the filing took place and how many partners were in the entity. I would lean toward filing an abatement form.

No Guarantee of Success.  Reality check.  It is fully expected that the IRS will appeal the Court of Claims decision.  Under appeal, if the government wins, then it is likely that there will be no recovery at all – making this a waste of our time and your $250 payment.  However, my job is to do everything I can to protect your rights to be able to recoup your money if the legal proceedings go well.  One other note: There is a chance that the IRS will deny certain abatement requests for all sorts of other reasons.  This might generate appeals or lawsuits that my office might lack the expertise (or licenses) to contest. Obviously, a cost-benefit analysis will determine how to proceed should issues arise in the future.

When Can I Expect My Refund?  I HAVE NO IDEA!  At this time, the Department of Justice has yet to file an appeal and there is no telling how long it could be before the D.C. Circuit Court of Appeals hears the case, much less rules on it.  It could be years. To my way of thinking, a modest fee to possibly protect the right to get back a lot more money in the future (plus the interest the IRS pays) would likely be worth the roll of the dice.

Non-Individual Abatements.  If you own an entity (LLC, S-Corp, or similar) or are the trustee of a trust that you believe has paid penalties and interest related to payroll taxes, income tax return late filings or payments, please fill out an engagement letter specifically for that entity.  We will charge a separate $250 flat fee for each entity you want us to research and file for.

Bottom Line Options. You can do one of three things:

1. Engage us to research and file the abatement form(s) as outlined above.
2. Do nothing and see how it shakes out – and maybe get lucky. Or,
3. Handle the filing(s) on your own.

As you can see, we are on a very tight time schedule. If you want to proceed, please fill out the engagement letter and email it to us by June 12th or complete the form online by going to our website (www.marclewistax.com/Kwong v United States). Online payment instructions can be found in the Engagement Letter.

Sincerely,

J. Marc Lewis, JD, LLM(Taxation), EA

Engagement Letter – Protective Claim and Abatement Services Relating to the Kwong v. United States Case

Purpose of This Engagement

Before we get formal, let me step back and explain our goal at its most basic level. A major ruling that might be of a significant benefit to you has just been handed down.  There is a consensus that we MUST file a “protective claim” with the IRS.  A “protective claim” is a filing that retains your right to petition the IRS in the future when the law is not currently settled. As it stands, by the time the Kwong case is resolved, the statute of limitations to file a claim will have expired and despite a ruling favorable to taxpayers, you likely would be prevented from seeking relief.  The abatement form(s) we potentially file will simultaneously “stake” your position to request relief when the law becomes settled and request the relief you are seeking.

Some clients may have unusual situations including divorces, deaths, new marriages and so forth that occurred over the last seven years.  We will address those situations as they present themselves but will be considered only after we begin the research process.  In 29 years, my business has never been faced with such a significant ruling that impacts so many clients with such a tight, “written-in-cement” deadline.  Please be patient with us as we try to navigate what will likely be a rotating hall of mirrors.

I am one of the few practitioners that does not regularly utilize Engagement Letters as a normal part of my tax preparation business. That said, the situation at hand is complicated enough, the law surrounding it fluid enough, the timeline long enough and complications sufficient enough that I feel it necessary to formalize the agreement in a manner that all parties understand what exactly is expected. Now to the formality:

Purpose of This Engagement

Thank you for engaging J. Marc Lewis & Associates, LLC (“Firm,” “we,” “our,” or “us”) to assist you in evaluating and pursuing potential federal tax relief opportunities that may be available as a result of the legal issues and developments arising from Kwong v. United States and related authorities.

The purpose of this engagement is to authorize this Firm to:

1. Determine whether you may qualify for refund, abatement, credit, or other relief associated with the legal theories implicated by the Kwong matter;
2. Prepare and file appropriate protective claims with the Internal Revenue Service;
3. Communicate with the IRS regarding such filings as reasonably necessary;
4. Monitor the status of such claims during the administrative process.

This engagement is limited solely to the matters described above unless expanded by a separate written agreement (but see Additional Abatement Opportunities section).

Scope of Services

Our services under this engagement may include:

1. Researching your eligibility for relief;
2. Reviewing applicable federal income tax returns and supporting records;
3. Obtaining and maintaining IRS authorizations;
4. Preparing and filing protective refund or abatement claims;
5. Responding to routine IRS correspondence relating to the filed claims;
6. Maintaining records relating to the administrative filing process.

Unless separately agreed in writing, this engagement does not include:

1. Representation in United States Tax Court, federal district court, bankruptcy court, the Court of Federal Claims, or appellate litigation;
2. Formal legal opinions;
3. Audit defense unrelated to Kwong-related claims;
4. Appeals conferences or litigation support after an IRS denial;
5. Collection matters;
6. Financial planning or investment advice.

Client Responsibilities

You agree to:

1. Provide complete, accurate, and timely information requested by our Firm;
2. Furnish copies of prior-year tax returns and supporting documentation when requested;
3. Promptly notify us of any IRS notices or correspondence received.

You acknowledge that our Firm will rely upon the information you provide and will not independently audit or verify such information unless otherwise required by law.

Fees and Billing

Flat Administrative and Research Fee

You agree to pay a non-refundable flat fee of $250.00 for the initial review, research, preparation, and filing services described in this engagement.

This fee is due prior to commencement of services.  If you pay via the firm’s website (www.marclewistax.com/Make Payment), please note in the “Comment” section the taxpayer’s name and that the payment is for Kwong representation.

Contingency Fee

In addition to the flat fee above, you agree to pay our Firm a contingency fee equal to 25% of any federal tax refund, abatement, reduction of tax, reduction of penalties, reduction of interest, credit, offset, or other monetary recovery obtained for your benefit relating to the claims covered under this engagement.

The contingency fee shall apply to:

– Refund checks (or direct deposits) issued by the IRS;

– Credits applied to existing or future federal tax liabilities;

– Penalty abatements;

– Interest abatements;

– Reductions in assessed liabilities;

– Any other measurable financial benefit resulting from the claims pursued under this engagement.

The contingency fee shall be calculated based upon the gross amount of the recovery.

Payment of the contingency fee is due immediately upon your receipt of the recovery or notice of credit or adjustment by the IRS.

You agree to provide our Firm with copies of all IRS correspondence and notices relating to the claims within ten (10) days of receipt.

Additional Abatement Opportunities

While researching Kwong opportunities, we will also keep our eyes open for other possible abatement opportunities that might be buried in the IRS records.  If we find additional funds available, we will file necessary documents to secure those funds for you.  Any funds we recover will be subject to the 25% contingency fee under the same terms listed in the Contingency Fee section.

No Guarantee of Outcome

You acknowledge and agree that:

– Tax positions associated with the Kwong-related issues may be subject to substantial uncertainty;

– The IRS may deny, challenge, delay, or litigate any claim filed;

– Applicable law may change;

– Court decisions, IRS guidance, Treasury Regulations, or legislative changes may affect the viability of any claim.

Our Firm makes no guarantee, representation, or warranty regarding:

– Whether any claim will be accepted;

– The amount of any recovery;

– The timing of any recovery;

– Whether the IRS may examine or challenge your tax return.

Statute of Limitations and Protective Filings

You understand that certain claims may be subject to strict statutory deadlines. In some situations, our Firm may recommend the filing of a protective claim to preserve your rights while legal issues remain unresolved.

You acknowledge that failure to timely provide requested information may impede our ability to file claims before applicable deadlines.

IRS Powers of Attorney and Authorizations

You authorize our Firm to prepare IRS Forms 2848, 8821, or similar authorizations as necessary to obtain transcripts, communicate with the IRS, and pursue the services covered by this engagement.

Such authorizations remain effective until revoked or withdrawn.

Record Retention

You should retain all original records supporting your tax returns and claims.

Our Firm may maintain electronic or paper copies of documents for administrative purposes; however, you remain responsible for maintaining your own permanent records. Absent a legal requirement to the contrary, our Firm may destroy records after a reasonable retention period.

Termination of Engagement

Either party may terminate this engagement upon written notice.

If the engagement is terminated

– The initial flat fee is non-refundable;

– You remain responsible for contingency fees attributable to recoveries arising from work substantially performed prior to termination.

Our Firm may withdraw from representation for nonpayment, lack of cooperation, conflicts of interest, ethical considerations, or other lawful reasons.

Termination does not affect obligations previously accrued under this agreement.

Governing Law

This agreement shall be governed by the laws of the State of Texas, without regard to conflict of law principles.

Any dispute arising under this agreement shall be resolved in the appropriate courts located in Collin County, Texas.

Entire Agreement

This engagement letter constitutes the entire agreement between the parties concerning the subject matter described herein and supersedes prior discussions or understandings.

Any modification to this agreement must be in writing and signed by both parties.

Sign the engagement letter here: J Marc Lewis & Associates Kwong Engagement Letter Signature Page

Make payment here: J Marc Lewis & Associates Payment

Privacy Policy: The privacy of your client information has always been important to J. Marc Lewis & Associates, LLC, and we have always been bound by professional standards of confidentiality. However, we are now required by law to formally inform you of our privacy policy. 

We collect nonpublic personal information about you that is provided by you or obtained by J. Marc Lewis & Associates, LLC with your authorization. This information may come from various sources, including information we receive from personal interviews, tax organizers, worksheets and other documents necessary to provide professional services to you. J. Marc Lewis & Associates, LLC does not disclose any nonpublic personal information about their clients or former clients to anyone, except as permitted or required by law, or when necessary to process transactions requested by a client. J. Marc Lewis & Associates, LLC restricts access to nonpublic personal information about you to members of our firm who need to know that information in order to provide you professional services. We retain records relating to the professional services that we provide you in accordance with accounting and government standards. J. Marc Lewis & Associates, LLC employs physical, electronic, and procedural security safeguards to protect your nonpublic personal information.

Your confidence and trust are important to us. If you have any questions or concerns regarding the privacy of your nonpublic personal information, please contact our office during normal business hours.