Bankruptcy Lawyer | Discharging Taxes in Bankruptcy


Bankruptcy Lawyer | What income taxes are dischargeable in Bankruptcy:

Bakersfield Bankruptcy Lawyer

Bankruptcy clients who I represent in Kern and Inyo Counties are sometimes able to discharge certain tax debts.

Personal income tax becomes dischargeable under what is commonly referred to as the ‘three year rule’ pursuant to Bankruptcy Code Section 507.

There are five considerations in determining whether the taxes are subject to discharge:

THREE-YEAR RULE. The most recent date the tax return is due is

over 3 years before the year the bankruptcy is filed. For federal taxes this is typically

April 15 or October 15 of the applicable year. 11 U.S.C. § 507(a)(8)(A)(i).

240-DAY RULE. The tax must have been assessed more than 240

days before the bankruptcy is filed. 11 U.S.C. § 507(a)(8)(A)(ii).

TWO-YEAR RULE. The Debtor must have filed or given his/her

1040 tax return (or equivalent report or notice) more than 2 years before the

bankruptcy is filed. 11 U.S.C. § 523(a)(1)(B)(i) or (ii).

NO FRAUD. The Debtor’s tax return must not have been

fraudulent. 11 U.S.C. § 523(a)(1)(C).

NO TAX EVATION. The Debtor must not have attempted to avoid or defeat the tax. 11 U.S.C. § 523(a)(1)(C).

In getting a determination of dischargeability, it is essential to obtain an account transcript from the IRS in order to obtain assessment dates and other information.


Max Gardner represents debtors, creditors, trustees, and creditors’ committees in Chapters 7, 11, 12 and 13. He has extensive bankruptcy litigation experience in trying cases involving dischargeability of debts, preferences, fraudulent conveyances, objections to claims, objections to exemptions, plan confirmation and a variety of other actions obtaining declaratory relief from the Bankruptcy Court. He also practices general debtor/creditor law in Kern County Superior Court. He is a long-time member of the Bankruptcy Dispute Resolution Panel for the United States Bankruptcy Court, Eastern District of California.


If you are considering filing Chapter 11 Bankruptcy in Bakersfield for your business, get advice sooner, rather than later. Call Max Gardner  Bankruptcy Lawyer at 661-888-4335