{"id":286956,"date":"2016-04-04T10:41:50","date_gmt":"2016-04-04T15:41:50","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/what-is-bankruptcy\/bankruptcy-and-taxes-eliminating-tax-debts-in-bankruptcy.html"},"modified":"2026-05-11T15:39:43","modified_gmt":"2026-05-11T20:39:43","slug":"bankruptcy-and-taxes-eliminating-tax-debts-in-bankruptcy","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/what-is-bankruptcy\/bankruptcy-and-taxes-eliminating-tax-debts-in-bankruptcy.html","title":{"rendered":"Can You Discharge Tax Debt in Bankruptcy?"},"content":{"rendered":"\n
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Can You Discharge Tax Debt in Bankruptcy?<\/h1>\n\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Tax debt<\/span> discharge is where income <\/span>tax<\/span> liabilities<\/span> are legally and permanently removed through a bankruptcy filing. To qualify, the debt must be at least three years old, the returns filed two years ago, and the tax assessment occurring 240 days before.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

You can include your tax debt<\/span> in a bankruptcy petition<\/span>. That\u2019s the good news. Most of it is not dischargeable in bankruptcy. That\u2019s the bad news. Only some types of <\/span>tax<\/span> debts<\/span> are dischargeable in bankruptcies under certain conditions.<\/p>\n

The Bankruptcy Code<\/span> permits debtors to claim IRS debts<\/span> based on their age and the nature of the tax. The chance of discharge depends on whether you\u2019re filing Chapter<\/span> 7\u00a0or\u00a0a Chapter 13\u00a0<\/span>bankruptcy<\/span> case<\/span>. This article reviews which types of <\/span>tax<\/span> debt<\/span> are more likely to be dischargeable. You should discuss your plans with a skilled bankruptcy attorney<\/span><\/a> if you still have questions about your bankruptcy case<\/span>.<\/p>\n

Types of Bankruptcy<\/span> and Tax Debt<\/span><\/strong><\/h2>\n

The courts are more likely to discharge <\/span>tax debt<\/span> in a Chapter 7 bankruptcy<\/span><\/a> than in a Chapter 13 bankruptcy<\/span><\/a>. In a Chapter 7, debtors liquidate their assets to pay off secured and unsecured creditors, but lack sufficient income to make monthly payments. In a Chapter 13, debtors have some ability to continue making payments to creditors.<\/p>\n

Automatic Stay<\/span><\/strong><\/h3>\n

In all bankruptcy actions, filing a petition initiates an automatic stay<\/span><\/a> on some collection actions<\/span>. The stay applies to IRS <\/span>tax<\/span> debt<\/span> collection (such as tax liens<\/span> on your property), but it does not stop tax audits, tax deficiency notices, or tax return<\/span> demands.<\/p>\n

Chapter 7 Bankruptcy<\/span><\/strong><\/h3>\n

A Chapter 7 bankruptcy<\/span>, also called a liquidation<\/span> bankruptcy, lets you discharge secured and unsecured debts<\/span>. Credit card<\/span> debts, medical bills, and personal loans are examples of dischargeable debt<\/span>. Some debts cannot be discharged, such as student loans<\/span> and most federal <\/span>tax<\/span> debt<\/span>. You can discharge some income <\/span>tax<\/span> debt<\/span> under certain conditions:<\/p>\n