Discharge

• It's possible to discharge certain tax debts in bankruptcy. The bankruptcy discharge is what keeps creditors, such as the government, from performing collection actions such as wage garnishments and bank levies after your bankruptcy ends. The discharge is basically an injunction. An injunction is a court order commanding a person or entity to engage in or refrain from engaging in particular conduct.
  
  

Age

• One criterion tax debt must meet to be dischargeable in bankruptcy is that it must be more than three years old. Generally, Congress gives taxing authorities plenty of time to collect income tax debts. However, it doesn't give them forever. Accordingly, if your taxes were filed and assessed in 2000 and there aren't any fraudulent circumstances surrounding the debt, you may be able to discharge them in bankruptcy if you file now or in the future.
  
  

Filing

• You cannot discharge tax debts arising from your failure to file a tax return. Even if you correct the matter by filing the returns late, the taxes from these previous years are still nondischargeable unless you filed them at least two years before you filed bankruptcy. So, for example, if you didn't file taxes from 2000 to 2004 and later decided to file those unfiled taxes in 2010, you cannot discharge the debt from those years in 2011 because less than two years have elapsed from the date you finally filed those tax returns.
  
  

Assessment

• If the government assessed your income taxes within the 240-day period preceding your bankruptcy filing, they are nondischargeable. An assessment is a determination of the amount of income tax debt the government says you owe. If you and the government are in the midst of negotiating your debt during the required 240-day period, the time spent negotiating will not be counted as part of the 240 days.
  
  

Chapter 13

• A Chapter 13 may help you discharge otherwise nondischargeable tax debts. A Chapter 13 would require you to pay your taxes through a 36-to-60-month payment plan. Missing payments could lead to the bankruptcy trustee making a motion to dismiss your case or convert it to a Chapter 7 bankruptcy. However, successfully completing your case could lead to the court discharging unpaid income tax balances.