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Under the BAPCPA bankruptcy law, chapter 7 and chapter 13 cases are treated the same concerning IRS income tax obligations. If the tax debt is dischargeable, then the penalty and interest calculated on the taxes will be discharged as well.

To be dischargeable, the tax liability due date for the return must be older than 3 years, the tax return must have been filed for at least 2 years, the tax liability must have been assessed at least 240 days and the taxpayer must not be guilty of a willful attempt to evade taxes.