Can Income Tax Debt Be Discharged in Chapter 7 Bankruptcy?

You may be able to discharge federal income tax in a Chapter 7 bankruptcy case if the tax debt meets certain criteria:

• You must have filed a tax return for the years in question at least 2 years before you file for bankruptcy
• Your tax return must have been originally due at least 3 years before you file for bankruptcy
• The IRS assessed the income tax debt at least 240 days prior to your bankruptcy filing (with certain exceptions)
• Your tax return was not fraudulent
• You did not attempt to willfully evade taxes

Discharging tax debt is a complex area with many rules surrounding it.  If you are burdened with federal income tax debts, you should consult with a bankruptcy attorney to determine whether, and to what extent, the debt would be dischargeable in bankruptcy.