Taxes in Chapter 13 Bankruptcy

One of the most powerful attributes of Chapter 13 is its treatment of tax liabilities for which the taxing authorities don't file a claim:

if no claim is filed,  the tax is discharged upon completion of the plan, even though under no other legal theory could the debtor escape liability without payment!*

Chapter 13 can therefore be used to make the taxing authorities come forth and assert any claims they have, or risk being discharged.   

This may be particularly powerful where individual corporate officers may have liability for unpaid trust fund taxes which have not been assessed against the individuals.   If the taxing authority does not file a claim within the time period set out in  law (6 months from filing) then the taxing authority loses its rights to assess or collect the tax after the Chapter 13 discharge.  

If a claim is filed, the debtor can pay it according to the priority of the tax and the terms of the plan.  If there is a dispute about the calculation of the tax or the debtor's liability for the tax, the bankruptcy court has jurisdiction to hear and decide the dispute.