In general, back taxes are not eliminated in bankruptcy. While bankruptcy can discharge many types of debt, including credit card debt and medical bills, it is much harder to discharge tax debts through bankruptcy.
Income taxes owed to the government may be dischargeable under certain circumstances, such as if they are old enough (typically at least three years old) and if the taxpayer has filed tax returns for those years. However, other types of taxes, such as payroll taxes or taxes owed due to fraud, are generally not dischargeable in bankruptcy.
Even if the tax debt is dischargeable, there are still certain requirements that must be met. For example, the taxpayer must have filed all tax returns for the relevant years, and the IRS or state taxing authority must have assessed the taxes at least 240 days before the bankruptcy petition is filed.
It's important to note that bankruptcy should only be considered as a last resort for resolving tax debts. Taxpayers should explore other options, such as an installment payment plan or an offer in compromise, before considering bankruptcy. Additionally, it's always a good idea to consult with a tax professional or bankruptcy attorney for guidance on how to handle tax debts in bankruptcy.
