Help your clients pursue potential IRS penalty refunds without adding more work to your firm. PenaltyBack is a tax technology platform that handles the eligibility screening, transcript analysis, refund calculations, and Form 843 generation, so your clients can move forward without your internal team building a new workflow around it.
Many taxpayers paid IRS penalties and interest during the COVID era without realizing those charges may now be refundable.
Recent court rulings, including Kwong v. United States and Abdo v. Commissioner, found that the IRS was required to apply mandatory disaster-related deadline relief during the federally declared COVID disaster period. Under IRC §7508A, certain filing and payment deadlines should have been automatically postponed.
That means certain penalties and interest assessed during that period were not validly imposed, creating a potential refund opportunity for individuals, business owners, partnerships, corporations, nonprofits, and employers with payroll tax filings.
Important note on Kwong: Kwong v. United States is currently on appeal. The IRS may challenge the legal validity of the ruling itself, not just individual claims. Taxpayers filing claims in reliance on Kwong should understand that the appellate outcome could affect those claims.
The Opportunity CPAs Should Be Aware Of
This may apply to clients who paid:
- Failure-to-file penalties
- Failure-to-pay penalties
- Estimated tax penalties
- Payroll tax penalties
- Information return penalties
- Interest tied to those penalties
Most taxpayers paid what the IRS charged and moved on. Many have no idea a refund opportunity may exist. For CPA firms, this is a chance to bring a meaningful tax development to clients before the window closes.
The Backend Work Is Where Firms Get Stuck
The process involves IRS transcript retrieval, penalty and interest analysis, refund calculations, documentation, and preparation of Form 843 refund claims. For clients with multiple tax years, entity types, or payroll filings, that workflow can get complex fast.
Most firms want to help clients, they just don't want to build a new department around it.
PenaltyBack is a tax technology platform built to make this process manageable. The platform pulls IRS transcript data, analyzes penalty and interest history, calculates the eligible refund amount, and generates the Form 843 claim documentation for the taxpayer to review and file.
CPA firms partner with PenaltyBack through a simple referral model. White-label options are available.
You share your unique referral link with clients. They check eligibility for free through the platform. You track signups, estimated refunds, and commissions through your partner portal in real time.
You remain the trusted advisor. The platform does the heavy lifting.
A Simple Referral Partner Model
As a referral partner, your firm receives a partner portal and a unique tracking link. You can surface the opportunity to clients who may have paid IRS penalties or interest for tax years 2020 through 2023.
From there, the platform guides them through the eligibility check and claim process. Your portal gives you full visibility into activity and commissions.
It is a low-lift way to deliver real value to clients while creating an additional revenue-share opportunity for your firm.
Timing Matters — Deadline Is Fast Approaching
Many claims may need to be filed before the applicable refund window closes. For many potential claims, July 10, 2026, is being treated as a key date to preserve rights.
Refunds are not guaranteed. Eligibility depends on each taxpayer's facts, IRS account history, and applicable assessments. And as noted above, the Kwong ruling is currently on appeal, the IRS may contest the legal basis for these claims at the appellate level, which could affect outcomes even for otherwise eligible taxpayers.
Filing a protective claim before the deadline preserves the ability to act. Waiting may eliminate that option entirely.
About PenaltyBack
PenaltyBack is a tax technology platform developed by Kenneth Dettman, Co-Founder and CEO of TaxNow. Kenneth is a CPA with nearly two decades of tax and compliance experience, including a prior role as Tax Partner at Alvarez & Marsal, where he led global tax operations and the firm's COVID-19 stimulus response team.
TaxNow and PenaltyBack are technology platforms built to make IRS data and refund workflows more accessible and efficient for taxpayers and the professionals who serve them.
Help Your Clients Check Before the Deadline
Your clients may have paid IRS penalties and interest that deserve a second look. They may not know this opportunity exists, and they may never check unless someone they trust brings it to their attention.
PenaltyBack gives CPA firms a streamlined way to surface this opportunity for clients, without taking on the backend work internally.
Sign up as a referral partner and start referring clients who may be eligible.