Western Digital Pushes in Court for Refund of IRS Interest -- WSJ
Dow Jones2026/10/05 17:13By Richard Rubin Attorneys for Western Digital argued Monday that federal law paused interest accruals on tax payments during the coronavirus pandemic, pressing a case that's being closely watched by large companies. "That command is clear and categorical," Jonathan Bond of law firm Gibson Dunn argued at the U.S. Court of Federal Claims in Washington. Other judges have determined that the law paused tax deadlines from January 2020 until July 2023. Western Digital's case is narrower than that but it's critical for companies with long-running tax disputes that started before the pandemic, some of which are still going. Western Digital contends that a 2019 statute about tax rules during disasters froze deadlines and interest accruals, which would shrink the bill the technology company paid in 2023 at the conclusion of a dispute over its 2008 tax return. Western Digital says the government owes the company a $20.8 million refund for interest it shouldn't have paid. The government is appealing a case about the length of the deadline extension and has warned that tens of billions of dollars are at stake. In the Western Digital case, the U.S. argues that any interest pause applies only to tax debts that arose during the pandemic, not to pre-existing tax debts. Judge David Tapp didn't rule from the bench on Monday, but he had much tougher questions for the government's attorney than he did for Western Digital's lawyers. This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage). (END) Dow Jones Newswires October 05, 2026 13:13 ET (17:13 GMT)
By Richard Rubin
Attorneys for Western Digital argued Monday that federal law paused interest accruals on tax payments during the coronavirus pandemic, pressing a case that's being closely watched by large companies.
"That command is clear and categorical," Jonathan Bond of law firm Gibson Dunn argued at the U.S. Court of Federal Claims in Washington.
Other judges have determined that the law paused tax deadlines from January 2020 until July 2023. Western Digital's case is narrower than that but it's critical for companies with long-running tax disputes that started before the pandemic, some of which are still going.
Western Digital contends that a 2019 statute about tax rules during disasters froze deadlines and interest accruals, which would shrink the bill the technology company paid in 2023 at the conclusion of a dispute over its 2008 tax return. Western Digital says the government owes the company a $20.8 million refund for interest it shouldn't have paid.
The government is appealing a case about the length of the deadline extension and has warned that tens of billions of dollars are at stake. In the Western Digital case, the U.S. argues that any interest pause applies only to tax debts that arose during the pandemic, not to pre-existing tax debts.
Judge David Tapp didn't rule from the bench on Monday, but he had much tougher questions for the government's attorney than he did for Western Digital's lawyers.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
October 05, 2026 13:13 ET (17:13 GMT)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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