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Taxes & Bankruptcy
Determine if your tax debt qualifies for discharge in bankruptcy proceedings.
Talk To A Real Tax Attorney
One honest conversation. You'll hang up knowing exactly what the IRS can — and can't — do to you, and how we'll stop them.
Call (877) 829-5267Tax Attorney · Villanova University School of Law · Admitted in Delaware, New Jersey, United States Tax Court
The Truth About Taxes & Bankruptcy — And What To Do Right Now
Contrary to popular belief, some tax debts can be discharged in bankruptcy. But the rules are complex — the debt must meet specific age, filing, and assessment requirements to qualify.
McCauley Law Offices works with bankruptcy attorneys to determine whether your tax debts qualify for discharge and develops the most advantageous strategy for your situation.
When Tax Debt Can Be Discharged
Not all tax debts are dischargeable. To qualify for discharge in Chapter 7 bankruptcy, the debt must meet ALL of these requirements:
- 3-Year Rule: The tax return was due at least 3 years before the bankruptcy filing (including extensions)
- 2-Year Rule: The tax return was actually filed at least 2 years before the bankruptcy filing
- 240-Day Rule: The tax was assessed at least 240 days before the bankruptcy filing
- No fraud: The return was not fraudulent
- No willful evasion: The taxpayer did not willfully attempt to evade the tax
Chapter 7 vs. Chapter 13 for Tax Debt
Chapter 7
Eliminates qualifying tax debt entirely — a fresh start. Best for taxpayers whose debts meet the 3-2-240 requirements and who don't have significant assets at risk.
Chapter 13
Creates a 3-5 year repayment plan. Non-dischargeable tax debts (like recent taxes or payroll taxes) must be paid in full through the plan, but penalties may be dischargeable. Can be a strategic tool for managing tax debt alongside other obligations.
Bankruptcy vs. Other Tax Resolution Options
Bankruptcy is just one tool in the toolbox. We compare it against OIC, installment agreements, and CNC status to determine which approach — or combination — serves you best. Sometimes an Offer in Compromise achieves a better result without the credit impact of bankruptcy.
People Just Like You Have Sat In This Exact Chair
They were terrified. They were ashamed. They thought they were the only one. Then they made one phone call — and everything changed.
Chapter 7 Discharge of Old Tax Debt
A taxpayer owed $78,000 in income taxes from 2015-2017. We confirmed the debts met all discharge requirements and coordinated with a bankruptcy attorney to eliminate the entire balance through Chapter 7.
Chapter 7 Discharge of $140,000 in Old Income Tax
A Delaware County professional discharged $140,000 of 2014–2016 income tax in Chapter 7. We ran the 3-2-240 analysis pre-filing, coordinated with bankruptcy counsel, and confirmed every year qualified.
Chapter 13 Plan to Cure Trust Fund Liability
A West Chester business owner used a Chapter 13 plan to pay non-dischargeable trust fund taxes over 60 months and discharge older dischargeable income tax — stopping a pending levy and consolidating the debt.
Every Day You Wait, The IRS Wins A Little More.
Penalties stack. Interest compounds. Legal options quietly disappear. One free call ends the spiral.
Exactly How We Take This Off Your Shoulders
The hardest step is the first one. Everything after that, we carry for you. No surprises. No runaround. No lectures.
- 1
Run the 3-2-240 analysis per year
We test each tax year against the discharge rules of § 523(a)(1) and identify what's dischargeable, what's not, and why.
- 2
Identify CSED and lien interactions
Bankruptcy tolls the CSED. We map the timing so the discharge actually delivers the relief expected.
- 3
Coordinate with bankruptcy counsel
We work directly with your bankruptcy lawyer to handle the tax-specific motions, proofs of claim, and confirmation issues.
- 4
Object to the IRS proof of claim
IRS claims are routinely overstated. We file an objection where the numbers, priority, or characterization is wrong.
- 5
Manage post-discharge compliance
A discharge requires staying current after filing. We help you maintain compliance so the discharge actually sticks.
Trusted by Thousands of Taxpayers
Real results from real clients
Robert M.
Sandra L.
Michael T.
Jennifer K.
David R.
Maria G.
Thomas W.
Patricia H.
James C.
Robert M.
Sandra L.
Michael T.
Jennifer K.
David R.
Maria G.
Thomas W.
Patricia H.
James C.
Robert M.
Sandra L.
Michael T.
Jennifer K.
David R.
Maria G.
Thomas W.
Patricia H.
James C.
Robert M.
Sandra L.
Michael T.
Jennifer K.
David R.
Maria G.
Thomas W.
Patricia H.
James C.
"McCauley Law resolved my $180,000 IRS debt for a fraction of what I owed. I was facing wage garnishment and bank levies — they stopped everything and negotiated an incredible settlement."
Robert M.
Philadelphia, PA
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The Questions Keeping You Up At Night — Answered
Other Ways We Shut The IRS Down
Offer in Compromise
Settle your tax debt for less than what you owe through IRS settlement programs.
Installment Agreement
Set up manageable monthly payment plans to pay off your tax debt over time.
Currently Not Collectible
Prove financial hardship to temporarily halt IRS collection activity.
Penalty Abatement
Remove or reduce IRS penalties through first-time abatement or reasonable cause.
One Phone Call. Or Another Sleepless Night.
Stop Letting The IRS Own Your Mornings.
You already know what happens if you do nothing. Pick up the phone for a free, confidential conversation with a real tax attorney — 30+ years inside the IRS playbook — and finally start fighting back.
Call (877) 829-5267 NowPrimary Sources & Authority
We cite the underlying IRS publications and statutes so you can verify everything on this page.