Emory Bankruptcy Developments Journal


David W. Patton


Section 505 of the Bankruptcy Code allows a court of determine tax related issues. Apart from three narrow exceptions contained within the provision, bankruptcy courts' authority under § 505 is essentially limitless. The broad language of § 505 extends bankruptcy courts' authority far beyond the context of bankruptcy, and courts have acknowledged that the plain meaning of the statute effectively creates a second tax court system. Interpreting § 505 in this manner raises constitutionality and federalism concerns and is ostensibly impractical. For these reasons, courts have taken three general approaches to define the extent of bankruptcy courts' authority under § 505. This Comment evaluates these three approaches and examines other limitations and mechanisms that courts have utilized to restrict bankruptcy courts' authority to adjudicate § 505 proceedings. It concludes that the 'arising under' approach is the ideal solution to § 505 because it emphasizes practicality while adhering to statutory canons and the goals of bankruptcy.