The Internal Revenue Code provides several meaningful tools to ease the tax pain when a business fails. The problem is that many of these provisions require advance planning, timely action, or both. If you’re not looking for them, you’ll miss them, and your client will pay for it. In this article, we’ll look at net operating losses, Section 1244, worthless stock and bad debts, the hobby loss rules, cancellation of debt, and key opportunities to look back at prior years.
Kwong v. United States: A Pandemic-Era Decision That Could Reshape Tax Deadlines, Penalties, and Refund Opportunities
Dominique Molina, CPA MST CTS
The 2025 court decision, Kwong v. United States, is quietly gaining traction among tax professionals for exactly these reasons. Its implications could be far-reaching, potentially opening the door to refund claims, penalty abatements, and revived tax deadlines that many assumed were long closed. But there’s a catch: the opportunity to act may be time-sensitive, and the window to preserve claims could begin closing in just a few short weeks. Here’s what the court actually decided and why it matters now.
