Can I eliminate tax debts, tax levies or tax seizures through bankruptcy?
Taxes can often be discharged (eliminated) through bankruptcy. If they cannot be eliminated, you can still use the bankruptcy laws to force the IRS or the state to accept a payment plan through chapter 13 that you can afford, rather than what they demand. Income taxes are usually dischargeable in bankruptcy if the due date of the return was more than three years ago and the taxes were assessed more than two hundred forty days ago. There are other rules which apply to tax dischargeability and whether your taxes are completely eliminated will depend upon a variety of facts such as whether or not you have filed returns, the date you filed the returns, the date the taxes were assessed, the value of your assets, etc. If the taxes cannot be eliminated, the bankruptcy laws will give you up to five years to pay them without any further penalties being charged. This can significantly reduce the amount you would have to pay the IRS if you attempted to pay the taxes on your own without using the
