Are state and federal tax obligations dischargeable in Chapter 7 Bankruptcy?

In Virginia, certain state and federal tax obligations may be dischargeable in Chapter 7 Bankruptcy. Generally speaking, any tax debt that is more than three years old may be eligible for discharge in a Chapter 7 Bankruptcy. In addition, the taxes must meet certain other criteria. For federal taxes to be discharged, the taxpayer must prove that the taxes were assessed more than 240 days prior to filing bankruptcy, the taxes must not have been assessed fraudulently and the taxpayer must not have filed a false return. Further, the taxpayer must demonstrate that the taxes have been paid timely and, for certain types of taxes, a return must be filed. For Virginia state taxes, the requirements are similar to the federal requirements. The taxes must have been assessed more than three years prior to filing bankruptcy, must not have been assessed fraudulently and the taxpayer must not have filed a false return. Additionally, the taxpayer must show that the taxes have been paid timely and, for certain types of taxes, a return must be filed. It’s important to note that even if taxes meet the criteria to be discharged in Chapter 7 Bankruptcy, the debt may still be non-dischargeable if the creditor objects to the discharge. Tax debts are often difficult to discharge and it is highly recommended that a qualified and knowledgeable attorney be consulted if a taxpayer is considering filing bankruptcy.

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Are state and federal tax obligations dischargeable in Chapter 7 Bankruptcy?

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