Filing for bankruptcy is a serious financial decision that should be carefully thought out and considered.

A serious financial decision with several implications, declaring bankruptcy will only absolve tax debts with very specific requirements. For tax debt to be discharged in a bankruptcy the following must be true:

• Tax debt is result from an income tax return filed at least two years prior to bankruptcy.
• Tax debt is result from an income tax return that which the due date was at least three years prior to bankruptcy.
• Tax debt has been assessed by the IRS at least 240 days prior to filing bankruptcy.
• Tax payer is not guilty of tax evasion or fraud.

There are two different types of bankruptcy filings, Chapter 7 and Chapter 13. Chapter 7 discharges all debts, while Chapter 13 will still involve paying off some of your debts, generally at a lower rate. Any tax debt that is included in a bankruptcy filing will extend the statute of liability of that debt for the time in bankruptcy.