Can outstanding federal and state taxes be included in bankruptcy?

All assets and all debts must be included in any bankruptcy case.  I believe the question you meant to ask was whether certain taxes are dischargeable in a bankruptcy case.   The answer is: Sometimes. Income taxes are dischargeable if all of the following prerequisites are met as of the date your bankruptcy case was filed: (1) it has been more than 3 years since the returns were last DUE (including extensions) to be filed, (2) the returns were timely filed or it has been at least 2 years since the returns were filed, (3) there was no fraud involved or attempts to evade the tax, AND, (4) the taxes were not assessed within the last 240 days. The analysis is actually somewhat more complicated than the above, as there are certain events and situations that can extend some of the above time periods, but those are the basic rules. It is important to hire a bankruptcy attorney who is familiar with tax discharge analysis to be sure if you qualify in your case to have your taxes discharged. Mark J. Markus, Attorney at Law Handling exclusively bankruptcy law cases in California since 1991. http://www.bklaw.com/ bankruptcy blog: http://bklaw.com/bankruptcy-blog/ Follow Me on Twitter:  @bklawr