Can You Eliminate Tax Debts in Bankruptcy?

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Can you eliminate tax debts in bankruptcy? In many cases, a taxpayer is still liable for tax debts after bankruptcy. However, bankruptcy law allows the discharge of tax debt only in some circumstances.

A tax debt is more likely to be discharged in Chapter 7 than in a Chapter 13 bankruptcy. In Chapter 13, tax debt, just like any other debt, is paid back on a repayment plan. Chapter 7 bankruptcies allow a debtor to discharge or wipe out debts, including federal tax debt.

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A tax debt is more likely to be discharged in Chapter 7 than in a Chapter 13 bankruptcy.

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Federal tax debt that can be wiped out, depending on the type of tax debt and certain conditions under Chapter 7 bankruptcy, such as:

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