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When Can I Discharge Tax Debt in Bankruptcy?



It's a common misconception that tax debt can't be included in your bankruptcy filing. But that's not true. In certain circumstances, you may be able to discharge, or erase, your tax debt in personal bankruptcy.

Discharging Tax Debt in Bankruptcy

To discharge your tax debt in Chapter 7 or Chapter 13 bankruptcty, it must meet five requirements:

  1. The tax debt must be for a tax year that was due at least three years ago.
  2. Your tax return for the tax debt must have been filed at least two years ago.
  3. The Internal Revenue Service tax assessment must be at least 240 days old.
  4. You must not have filed a fraudulent tax return for the tax debt in question.
  5. You must not have been found guilty of tax evasion.

Tax debt that meets all five requirements is eligible to be discharged in bankruptcy. A tax lawyer can review your tax returns and tell you if particular debt is eligible to be included in your bankruptcy filing.

Visit LawyerLocator to learn more about tax law or to locate a tax lawyer in your area.