A common question that people have about bankruptcy is whether they will be able to “wipe out” (referred to in bankruptcy terminology as “discharge”) certain taxes owed to the Federal and State governments if they file bankruptcy.
If you file a Chapter 7 bankruptcy case, then your income taxes can only be wiped out if all of the following are true:
- the due date for the tax return for the tax year in question must be more than three years ago,
- the tax return for the tax year in question must have been filed on time (if the tax return was not filed on time, then it must have been filed more than two years ago), and
- the tax must have been assessed against you by either the Federal or State government at least 240 days (eight months) ago.