PenaltyBack vs Your CPA: Which Path Should You Use for a COVID-Era IRS Refund Claim?

In one paragraph

A CPA and PenaltyBack are not always alternatives — many taxpayers use both. A CPA prepares returns, advises on tax planning, represents clients in IRS matters, and handles the full year-round tax relationship. PenaltyBack is specialized: it does one specific workflow — the Kwong-based Form 843 protective refund claim — and prices it as a contingency fee paid only on recovered refunds. Whether to use a CPA, PenaltyBack, both, or neither depends on what your CPA already offers (and at what fee), how many tax years are affected, and the value of your time.

The two paths at a glance

What your CPA may — or may not — already be doing

The first practical question is whether your CPA has already filed a Kwong-based Form 843 protective claim on your behalf, or plans to. There is no industry-standard answer; CPA firms vary widely. Roughly four patterns are common:

1. The CPA has already filed protective claims for all affected years. Some firms ran a portfolio review after Kwong and proactively filed for clients with eligible assessments.
2. The CPA offers Kwong-claim work as a separate, billable service. Common at firms that bill hourly or by project. Typical bill: $300–$1,200 per single-year claim depending on firm rate.
3. The CPA does not offer Kwong-claim work. Some firms have decided not to take on protective-claim work given the pending appeal or staffing constraints.
4. The CPA hasn't raised it yet. Especially common if the firm focuses on small-business returns or industries with lower COVID-era penalty exposure.

The fastest way to find out: ask directly. "Have you reviewed my IRS account transcripts for COVID-era penalty assessments that may be refundable under Kwong v. United States? Do you offer that work as part of standard tax prep, or as a separate engagement?"

When working with your CPA tends to fit well

• Your CPA has already proactively filed your Kwong claims. The work is done.
• Your tax situation is complex and integrated. Multi-state filings, partnership or S-corp pass-throughs, foreign-asset reporting where Kwong-claim work intersects with other decisions.
• You expect IRS controversy or audit follow-up. Your CPA can handle the dispute end-to-end.
• You value the year-round relationship. Tax planning, quarterly estimated-tax decisions, year-end strategy.
• The CPA's fee for Kwong work is bundled into your existing retainer. Marginal cost zero.

When PenaltyBack tends to fit well

• You don't have a CPA, or your CPA is not offering Kwong-claim work.
• Your CPA's fee structure for Kwong is hourly or flat-fee, and the math favors a contingency. For potential refunds of $200–$500, hourly CPA fees can exceed the recovery.
• You want $0 upfront and no exposure if no refund is recovered.
• You have multiple affected tax years and want a unified workflow. Many CPA engagements bill per year; PenaltyBack handles multi-year in the same 5–7 business day window.
• The Kwong claim is the only IRS work you need done.

When using both makes sense

A common pattern: the taxpayer keeps their CPA for tax preparation, planning, and representation, and uses PenaltyBack to handle the Kwong-claim filing. The two paths are not mutually exclusive. PenaltyBack's view-only IRS access does not interfere with the CPA's work.

1. Run the free eligibility check at /get-started.
2. Share the result with your CPA.
3. Decide together whether the CPA wants to file the claim or whether it makes sense to let PenaltyBack handle that single workflow while the CPA handles everything else.

Fee structures, in detail

• CPA: typically time-based or flat-fee. Hourly $150–$400/hour, per-form flat $200–$800, or rolled into the annual retainer. Paid regardless of whether the refund is recovered.
• PenaltyBack: contingency-only. $0 upfront. Percentage of any refund actually recovered. The exact percentage is available during signup. If no refund is recovered, the taxpayer owes nothing.

Which is more economical depends on three variables: the size of the potential refund, the CPA's fee for Kwong work specifically, and whether the refund actually materializes. For potential refunds under $1,000, time-based fees often consume most of the recovery; contingency preserves more. For multi-thousand refunds, the math is closer.

Frequently asked questions

How do I know if my CPA already filed a Kwong claim for me?

Ask directly. Most CPA firms keep records of every claim filed and can confirm by tax year.

Will my CPA be unhappy if I use a separate service for the Kwong claim?

It depends on the firm. The professional answer is to check before assuming.

If PenaltyBack files the claim and the IRS denies it, will my CPA represent me in the dispute?

Most CPAs will represent existing tax-prep clients in disputes regardless of who originally filed.

Will PenaltyBack share my filings with my CPA?

PenaltyBack operates within IRS-permissioned, view-only access — the same transcript data your CPA sees. PenaltyBack provides copies of the Form 843 and certified-mail receipt to the taxpayer.

If my CPA charges $0 extra to file Kwong claims, why would I use PenaltyBack?

You probably wouldn't. PenaltyBack tends to fit cases where there is no existing CPA relationship for Kwong work or the fee structure favors a contingency.

Is PenaltyBack cheaper than a CPA?

Not always. The honest answer: run the math both ways once you know the potential refund size and the CPA's quoted fee.

What about a tax attorney?

Tax attorneys typically come into play for IRS controversy work — audits, collection disputes, criminal exposure. For a routine protective claim, an attorney is usually not necessary.