Bankruptcy Courts Resolving Tax Disputes Under § 505—What Are The Limits? (Bush v. U.S.; Etc.)

What are the limits of a bankruptcy court’s jurisdiction and authority to resolve tax disputes under § 505 ?[Fn. 1]

That’s the issue before the U.S. Supreme Court in a Petition filed on July 25, 2025, in Bush v. United States of America , Case No. 25-108. The specific questions are:

“Whether §505(a)(1) confers jurisdiction on the bankruptcy court to adjudicate the amount and legality of a debtor’s tax liabilities”; and

“Whether the bankruptcy court has jurisdiction under 28 U.S.C. §1334(b) to determine the amount of a debtor’s non-dischargeable debt.”

Facts

Debtors live on a farm.

On September 6, 2013, the IRS issues a Notice of Deficiency for 2009, 2010, and 2011 in amounts that include 75% fraud penalties of $80,275.50. Then, Debtors file a petition with the U.S. Tax Court an