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Ask WALLSTREETESQ Your Own Question
Category: Bankruptcy Law
Satisfied Customers: 17252
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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Can filing chaper 7 relieve you of Irs and state taxes owed

Customer Question

Can filing chaper 7 relieve you of Irs and state taxes owed because you are unable to pay?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 5 years ago.

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification, 


You can discharge some taxes, but they have to be debts that fall under the rules,


Income taxes can be discharged in bankruptcy if all of the following conditions are met, otherwise the taxes will be due at the end of the bankruptcy.

  • They are income taxes (not payroll, or debt accumulated from fraud penalties, or trust fund taxes)

  • The taxes were assessed at minimum 240 days before you file for bankruptcy

  • The taxpayer did not commit fraud or try to evade taxes

  • The taxes have to be due three years from the date of your bankruptcy filing (includes extensions)

  • All tax returns were filed at least 2 years before filing for bankruptcy (a substitute return is NA)

    ** You must also prove to the court that you filed taxes returns for the last 4 years


This would apply to Federal and State taxes,