If you are having trouble paying your bills and you owe back taxes, you may be wondering if a bankruptcy would discharge the tax debt.  The answer is unfortunately an unsatisfying:  maybe.

Federal and state tax debts may be discharged in bankruptcy if all of the following requirements are met:

• The taxes are more than three years old;
• The tax return was filed on time, or if filed late, was filed at least 2 years before filing bankruptcy;
• If the tax was assessed by the taxing authority, it was assessed more than 240 days before the bankruptcy filing; and
• There cannot have been any fraud or willful tax evasion.

If your tax debts do not meet each of these rules, you will still have to pay the taxes after your bankruptcy.

Chapter 13 May Help

If you have tax debts which will remain payable after bankruptcy, you may wish to consider filing your case under Chapter 13 as you would be able you to repay the non-dischargeable taxes through monthly payments over a three to five-year period.