Justices Decline to Review Bankruptcy Law’s Tax Penalty Powers

The US Supreme Court declined to consider an appeal surrounding a bankruptcy court’s authority over the discharge of an Indiana couple’s tax liabilities when the outcome wouldn’t affect distributions to creditors.

The justices rejected the petition Monday to review the US Court of Appeals for the Seventh Circuit’s narrow interpretation of whether a bankruptcy court had jurisdiction to decide a dispute over the amount of federal tax liability that could be eliminated for Donald and Kimberly Bush through their 2014 bankruptcy.

The Seventh Circuit in April 2024 said the US Bankruptcy Court for the Southern District of Indiana lacked jurisdiction ...