In the case of Kokoszka v. Belford, 1973, the U.S Supreme Court ruled that income tax refunds are to be considered as part of a bankrupt individual's estate and can therefore be used to pay off creditors. The petitioner, Frank Kokoszka had filed for bankruptcy and argued that his anticipated tax refund should not be included in his estate because it was a "right to receive" under the Bankruptcy Act rather than an asset or property. However, the court disagreed with this interpretation stating that such an exclusion would undermine Congress' intent when they broadened definitions within bankruptcy law in order to ensure equitable treatment of all claims against insolvent estates. Therefore, despite being classified as public assistance benefits by some courts due their nature as returns on overpaid taxes rather than earned income; these funds were deemed accessible for debt repayment purposes.

In the dissenting opinion for Kokoszka v. Belford, Justice Douglas argued that income tax refunds should be considered as part of a bankrupt's estate. He contended that the majority's decision to exclude them was based on an overly narrow interpretation of "property" under bankruptcy law. According to him, this ruling could potentially deprive creditors of significant assets and undermine the purpose of bankruptcy proceedings - which is to distribute a debtor's property fairly among his or her creditors. Furthermore, he pointed out inconsistencies in how different types of government benefits were treated under this ruling; while social security payments were excluded from a bankrupt’s estate due to their nature as future earnings replacement, tax refunds – essentially overpayments on past earnings – were not given similar consideration.