skip navigation
Search Help
Navigation Help

Tax Map Index

Tax Topic Index

Affordable Care Act
Tax Topic Index

Tax Topics

About Tax Map Website
Publication 908

Court Jurisdiction Over Tax Matters(p24)


Bankruptcy Court(p24)


Determination of tax liability.(p24)

Generally, the bankruptcy court has the authority to determine the amount or legality of any tax imposed on a debtor under its jurisdiction and the bankruptcy estate, including any fine, penalty, or addition to tax, whether or not the tax was previously assessed or paid.
The bankruptcy court does not have authority:
  1. To determine the amount or legality of a tax, fine, penalty, or addition to tax that was contested before and adjudicated by a court or administrative tribunal of competent jurisdiction before the date of the bankruptcy petition filing, or
  2. To decide the right of a tax refund for the bankruptcy estate before the earlier of:
    • A determination for refund by the IRS or other governmental unit, or
    • 120 days since the trustee properly requested the refund.

Tax Court(p24)


Tax Court proceedings.(p24)

The filing of a bankruptcy petition results in an automatic stay immediately stopping the commencement or continuation of certain Tax Court proceedings. In individual bankruptcy cases, the stay prohibits the commencement of a Tax Court case regarding the tax liabilities of the debtor for tax periods ending before the bankruptcy court's order for relief. If the debtor is a corporation, the automatic stay prohibits the commencement or continuation of Tax Court proceedings relating to liabilities for tax periods that the bankruptcy court may determine. Generally, in corporate chapter 11 cases, the bankruptcy court determines the debtor corporation's tax liabilities for tax periods ending before the date a plan of reorganization is confirmed.
The bankruptcy court has the power to lift the automatic stay and allow the debtor to begin or continue a Tax Court case. Accordingly, during the pendency of the bankruptcy case, in effect, the bankruptcy court has the sole authority to determine whether the tax issue will be decided by the bankruptcy court or Tax Court.
Suspension of time for filing.(p24)
In any bankruptcy case, the 90-day period for filing a Tax Court petition after the issuance of the Statutory Notice of Deficiency is suspended for the time the debtor is prevented from filing the petition due to the bankruptcy case, and for an additional 60 days thereafter. Accordingly, if the Statutory Notice of Deficiency was issued before the bankruptcy petition was filed, and the 90-day period had not expired, the running of the 90-day period will be suspended while the stay prevents the commencement of the Tax Court case. The 90-day period will begin to run 60 days after the stay against filing the petition ends. The suspension is effective for any part of the 90-day period remaining on the date of the bankruptcy petition filing.
However, the 90-day period for filing a Tax Court petition after issuance of a Notice of Determination in an innocent spouse case is not suspended by filing of a bankruptcy petition. Thus, if the IRS issues a final Notice of Determination denying the debtor's request for innocent spouse relief during the bankruptcy case, the debtor is prohibited from petitioning the Tax Court while the automatic stay is in effect; however, the 90-day period for petitioning the Tax Court is not suspended. In these circumstances, the debtor must file a motion with the bankruptcy court asking the bankruptcy court to lift the automatic stay. If the bankruptcy court lifts the stay, then the taxpayer can petition the Tax Court so long as the 90 days for petitioning has not expired.
Trustee may intervene.(p24)
The trustee of a bankruptcy estate in any title 11 bankruptcy case may intervene on behalf of the estate in any proceeding in the Tax Court to which the debtor is a party.