You can discharge tax debt from income taxes, but not payroll taxes or fraud penalties. Chapter 13 bankruptcy helps by eliminating or minimizing tax liabilities. Generally, taxes that are more than three years old can be forgiven depending on your disposable monthly income. Dischargeable tax debt won’t incur interest or penalties, but nondischargeable tax liability might. You must pay off non-dischargeable taxes within the next three to five years. You can take care of tax liens through Chapter 13 bankruptcy filings as well.