Are Tax Debts Dischargeable in Bankruptcy

The dischargeability of tax debts in bankruptcy depends on various factors, including the type of tax debt, the age of the debt, and the specific bankruptcy chapter filed. Generally, income tax debts may be dischargeable in bankruptcy, but certain criteria must be met.

1. Income tax debts can be discharged in both Chapter 7 and Chapter 13 bankruptcies if they meet the following requirements:
2. The tax debt must be related to income taxes. Other types of taxes, such as payroll taxes are typically not dischargeable.
3. The tax return must have been due at least three years before the bankruptcy filing date.
4. The tax return must have been filed at least two years before the bankruptcy filing.
5. The tax assessment must have been made at least 240 days before the bankruptcy filing. This requirement may be extended if there was an offer in compromise or a previous bankruptcy filing.
6. The taxpayer must not have committed any fraudulent or willful tax evasion.

It is important to note that there are specific rules and criteria for discharging tax debts therefore, it is advisable to consult with a seasoned bankruptcy attorney or tax professional to understand your options thoroughly.