Court Limits COVID Penalty Relief While Senators Question Social Security Office Closures

A Tax Court ruling in Bowen v. Commissioner narrowed the scope of pandemic-related penalty relief, and Democratic senators have asked Social Security Commissioner Frank Bisignano to explain recent reductions in in-person services.

In Bowen v. Commissioner, the U.S. Tax Court ruled that extensions of filing deadlines due to the COVID-19 disaster do not erase accuracy-related penalties, and it postponed consideration of interest issues until it has jurisdiction. This contrasts with earlier rulings in Abdo v. Commissioner and Kwong v. United States, which had been interpreted as supporting broader pandemic-era penalty and interest refunds. The decision therefore narrows the relief taxpayers can claim, though broader questions remain unresolved.

Separately, a group of Democratic senators have written to Social Security Commissioner Frank Bisignano demanding clarification on reports that certain field offices have stopped offering in-person services, a move that could affect complex claims like survivor benefits and appeals. The Social Security Administration argues that any service limitations are due to building renovations or maintenance, not staffing shortages, and points out that many routine transactions remain available online. Bisignano also serves as the chief executive of the IRS, raising additional concerns about customer service across both agencies.