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Federal Income tax Discharged in Bankruptcy

Houston, TX |

What is needed for an individual to discharge federal income taxes in bankruptcy? I was told these: (1) Taxes on returns due more than 3 years ago; (2) Taxes assessed by the IRS more than 240 days ago (3) Taxes on tax returns filed late but filed more than 2 years before bankruptcy (4) no fraud on the part of the bankrupt to evade tax. (5) not trust fund liability from payroll taxes, which means the employer portion is discharged???? Is this complete? I understand too that a tax return prepared by the IRS on their available information doesn't count as a tax return for bankruptcy discharge purposes, and thereby none of the taxes are dischargeable....ever ????

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Attorney answers 3


You've got the basics, but there's enough more to it that a California bankruptcy and tax expert has published a treatise and offers seminars. Just for example, there are events that can toll the time periods you've mentioned. The strategic decision about when to file a bankruptcy case, and which chapter to file under, depends critically on whether there are tax liens and whether tax years are dischargeable, not dischargeable but priority, or simply not dischargeable. Choosing wrong can cost you a great deal of money if you have significant tax debt. Consequently, you should try to find an attorney who is both a bankrutpcy and a tax expert.


You are pretty much right on. Your bankruptcy attorney can obtain and review your tax transcript to make a determination.

I am licensed only in Texas. Offering information of a general nature in response to a question is not intended to be legal advice in your state.


Get a transcript of your tax account and bring it to a lawyer who handles tax issues in bankruptcy. The information on that transcript together with information about whether you applied for an offer in compromise, filed for bankruptcy or had a return filed for your by the IRS should get you there.

As my colleagues said, guessing wrong could be disastrous.

Mr. Goldstein is a Virginia-licensed attorney only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation. Contacting Mitchell Goldstein or the Goldstein Law Group does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised.

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