Nondischargeable Debts

Comprehensive guide to debts that survive bankruptcy under 11 U.S.C. Section 523

The Three Timing Rules

For income taxes to be dischargeable, ALL three must be met: (1) 3-year rule -- the tax return was due at least 3 years ago, (2) 2-year rule -- the return was actually filed at least 2 years ago, (3) 240-day rule -- the tax was assessed at least 240 days ago.

Never Dischargeable

Payroll taxes and trust fund taxes are never dischargeable. Taxes where no return was filed are never dischargeable. Taxes resulting from fraud or willful evasion are never dischargeable. Penalties related to nondischargeable taxes are also nondischargeable.

Tax Liens Survive

Even if the personal liability for a tax debt is discharged, a recorded tax lien survives bankruptcy and continues to attach to your property. You must deal with liens separately -- either paying them, negotiating with the IRS, or waiting for them to expire.

Full tax debt guide

Bankruptcy and Taxes

Related Resources

Nondischargeable Debts -- Which debts survive bankruptcy under Section 523(a)

Taxes in Bankruptcy -- Which tax debts can be discharged and which survive

The Discharge Injunction -- How Section 524 permanently bars creditor collection after discharge

Federal Rules Committee

This research supports Suggestion 26-BK-3 to the Advisory Committee on Bankruptcy Rules

Proposing automated Section 1328(f) discharge bar screening in federal bankruptcy courts