IRS Argues Pandemic Didn’t Stop Accrual of Interest on Tax Debt

Relief from tax deadlines during the Covid-19 pandemic didn’t stop interest from accruing on tax debts that predate the pandemic, the IRS is arguing in one of the most closely watched tax lawsuits.

Western Digital Corp., a California data storage device company, is not entitled to a nearly $21 million tax refund because Congress never intended its deadline relief statute to be interpreted so broadly, the IRS argued in a June 8 response brief at the US Court of Federal Claims.

The company was found to have a more than $53 million underpayment for the 2008 tax year. It fully ...