When no return has been filed, or has been filed within two years of the
bankruptcy, the taxes cannot be discharged in Chapter 7, but can
be discharged in Chapter 13 if the tax was first due more than three years
before the commencement of the bankruptcy case and was not assessed within 240
days of the filing.
A debtor can expect to have to prepare and file at least the returns for the priority
tax years. Click
here to go to the IRS forms page for downloadable forms for prior tax years.
Filing a return constitutes an assessment of the tax. Filing a
return on the eve of bankruptcy for a year long past could make a tax that is
otherwise dischargeable in Chapter 13 into a priority for at least 240 days
from assessment! Proceed with professional advice.
Be aware that this provision of the Bankruptcy Code, allowing non filing
debtors to get back into the tax system through Chapter 13, is threatened in the
pending changes to bankruptcy laws.