Last updated September 18, 2026
Short answer
Some income taxes can be discharged if they meet strict age, filing, and assessment tests in the Code. Recent income taxes, trust-fund taxes, and many payroll taxes are not discharged. Chapter 13 can pay priority taxes over the life of a plan. Do not assume a tax balance is wipeable.
Tax discharge is technical. Section 523(a)(1) and § 507(a)(8) work together. Practitioners often discuss a three-year return due date, a two-year filing rule, and a 240-day assessment rule, plus fraud and late-return issues. Those tests have many exceptions (offers in compromise, prior bankruptcies, unfiled returns). This page explains the idea and points to IRS and Code sources. It does not stamp a do-it-yourself checklist as complete.
Why the dates matter
Priority tax claims generally must be paid in full in Chapter 13 (§ 1322(a)(2)). If a tax is not priority and not excepted, it may be general unsecured and dischargeable. The IRS explains bankruptcy interaction in IRS publications; the Code controls. Transcripts (account transcripts, not just a balance) are usually required before anyone should predict dischargeability.
Levies and the stay
The stay can stop many IRS levies, with tax exceptions in § 362(b). Refunds and setoff are their own topic—see tax refunds.
Chapter 7
Chapter 7 may discharge qualifying older income taxes and will not discharge taxes that remain excepted. The IRS can still have lien rights.
Chapter 13
Priority taxes are typically paid through the plan. Remaining dischargeable unsecured tax (if any) may be discharged at completion. Stay and adequate-protection issues still apply to enforced collection.
How Brock & Stout can help
We request or review tax transcripts with you, map years against the Code categories, and discuss Chapter 7 versus Chapter 13 when a tax levy or installment is pending. We do not guarantee that any tax year will be discharged.
Frequently asked questions
Usually not. Recent income taxes are often still priority and excepted. Exact timing requires transcripts and the due date of the return, not the calendar year alone.
Trust-fund and many employment taxes are treated more harshly than older income tax. Do not analogize them to a 1040 balance.
Related resources
- Are Tax Refunds Part of a Bankruptcy Estate? — Are Tax Refunds Part of a Bankruptcy Estate?
The portion of a refund earned before filing is typically property of the estate. You may exempt it if leftover personal-property or wildcard room exists under state law. The IRS may set off a refund against tax you still owe. Timing of the filing relative to the refund is a planning issue—not a loophole to hide funds.
- Debts Bankruptcy May Eliminate — Debts Bankruptcy May Eliminate
Many unsecured debts can be discharged in bankruptcy. Some claims—recent taxes, domestic support, and most student loans—are treated differently. The right chapter depends on income, assets, and whether you need to catch up on a house or car.
- What Is a Bankruptcy Discharge? — What Is a Bankruptcy Discharge?
A discharge is a federal court order that enjoins personal collection of debts that are discharged. It is not a refund, not a title-clearing tool by itself, and not available for every debt. Timing differs in Chapter 7 and Chapter 13.
Not sure whether Chapter 7 or Chapter 13 fits?
We can review your debts, assets, and goals and explain options that may be available under current law.
This page is general educational information about bankruptcy as of the date shown. It is not legal advice, does not create an attorney-client relationship, and does not guarantee results. Outcomes depend on individual facts and current federal and state law. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
