1. the taxes are three years or older. The importance is the filing date of April 15th. Using the 2006 tax year as an example: the taxes will be dischargeable after April 15th of this year (April 15th, 2007 was the filing deadline for 2006). Based on this measure, 2005 taxes and older are already dischargeable.
2. the tax returns need to have been filed. If they were filed by the IRS, they are usually NOT dischargeable. The returns need to be on file for at least TWO YEARS.
There are other criteria that you will need to talk with your attorney about. However, we are talking 1040 taxes here. 941 taxes or 6672 taxes are NOT dischargeable in bankruptcy.
The reason I am posting on this subject is that there are many times when I recommend a client to a bankruptcy attorney instead of having myself represent him/her. These are the criteria that trigger my recommendation:
1. The taxes are old.
2. The returns are filed.
3. The client has large credit card debt.
4. The client has large medical bills.
A tax professional is NOT doing their job if they don't examine the bankruptcy option for people who really would benefit from it.