Can I Discharge Tax Debt in Bankruptcy?

Some federal income tax debt can be discharged in Chapter 7 bankruptcy — but only if strict criteria are met. The tax debt must be at least 3 years old (based on the original due date), you must have filed a return at least 2 years before filing bankruptcy, and the taxes must have been assessed at least 240 days before the bankruptcy filing. Taxes resulting from fraud or willful evasion are never dischargeable. Payroll taxes (trust fund taxes) cannot be discharged in bankruptcy. If you meet all the criteria, discharging old income tax debt through bankruptcy can be a powerful fresh start — consult a bankruptcy attorney to evaluate your situation.