Key Takeaways Income tax debts may be dischargeable in Chapter 7 bankruptcy if they meet the 3-year, 2-year, and 240-day rules Chapter 13 bankruptcy allows you to repay tax debt over 3-5 years while stopping IRS enforcement via the automatic stay Trust fund taxes ( TFRP ), fraud penalties, and willful evasion debts are NEVER dischargeable Filing for bankruptcy triggers the automatic stay, immediately stopping all IRS collection actions Tax liens filed before bankruptcy survive the discharge — the lien remains on property even if the personal liability is discharged When Tax Debt Can Be Discharged Under Chapter 7 bankruptcy, income tax debts can be discharged (eliminated) if ALL of the following conditions are met: The Three Timing Rules Rule Requirement Explanation 3-Year Rule Tax return was due at least 3 years before filing bankruptcy For a 2022 return (due April 2023), bankruptcy must be filed after April 2026 2-Year Rule Tax return was actually filed at least 2 years before bankruptcy filing Late-filed returns start the 2-year clock from the date the return was actually filed 240-Day Rule Tax was assessed at least 240 days before bankruptcy filing If the IRS assessed tax from an audit, 240 days must have passed since assessment Additional Requirements No fraud: You did not file a fraudulent return No willful evasion: You did not willfully attempt to evade the tax Return was filed: You must have actually filed a return (or substitute for return that meets certain requirements) Chapter 7 vs. Chapter 13 for Tax Debt Chapter 7 — Liquidation Chapter 7 can discharge qualifying income tax debts entirely. However: Non-exempt assets may be liquidated to pay creditors (including the IRS) Only income taxes meeting ALL timing rules are dischargeable Trust fund taxes, fraud penalties, and certain other tax debts survive Federal tax...