Under bankruptcy laws, you can discharge certain individual income taxes depending on the age of the tax and the chapter of bankruptcy. Under Chapter 7 bankruptcy income taxes due generally within three years of the date of filing a bankruptcy petition cannot be discharged. Income taxes owed more than three years of the date of filing can be discharged. The law also requires that the income tax returns have been timely and properly filed, and no attempt by the taxpayer has been made to evade or defeat the tax.

Payroll taxes however, like social security and employee withholding cannot be discharged under Chapter 7 bankruptcy, even after three years. Payroll taxes are monies that have been withheld from an employee's paycheck by a company. The person responsible for withholding these from a payroll check, if determined by the I.R.S. to be a "responsible person" can be personally liable for these company payroll taxes, should the company fail to make payment to the I.R.S.

Under Chapter 13 bankruptcy, often referred to as a wage earners plan. So long as you complete your plan payments the bankruptcy court has the discretion to discharge income taxes without regard to the 3 year rule. Plan payments can last as long as five years and are based upon a mathematical formula that takes into account an individual's income and allowable household expenses.