Certain tax liabilities, however, may be discharged in bankruptcy. The liability is for a tax return actually filed at least two years before the date the bankruptcy case is initiated. The tax return was due at least three years, including any time or extensions, at least three years before the date of filing the bankruptcy petition. The taxes were assessed at least 240 days before the date of filing of the bankruptcy petition. The above time periods are extended based on certain specific actions such as a prior bankruptcy filing, pending Offer in Compromise, and other limited actions.
Timing can be important in attempting to discharge old tax liabilities.
Consult with a bankruptcy attorney to evaluate the proper time for you to file bankruptcy to enable you to take advantage of the Chapter 7 discharge.