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

In Washington, state and federal tax obligations are dischargeable in Chapter 7 Bankruptcy in some cases. Generally, the three primary factors that determine whether or not these obligations are dischargeable are the type of tax, the tax year for which the tax is due and the timing of the bankruptcy filing. If the tax that is owed is an income tax, the tax year for which it is due must be more than three years old from the date the bankruptcy is filed. In addition, the tax return for the year in question must have been filed more than two years before the date of the bankruptcy filing. Furthermore, the IRS must have assessed the tax in question more than 240 days before the bankruptcy was filed. If these conditions are met, then the income tax obligation can be discharged in Chapter 7 Bankruptcy. On the other hand, unpaid payroll taxes, sales taxes and other miscellaneous taxes are typically not dischargeable in Chapter 7 Bankruptcy. This means that the taxpayer must still pay these taxes even after filing for Chapter 7 Bankruptcy. It is important to consult with an experienced bankruptcy attorney to understand the full impact that filing for bankruptcy can have on tax obligations. An attorney can help evaluate any tax obligations that may be dischargeable and provide guidance on how to proceed.

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

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