I recently represented someone who had a large amount of federal income tax liability.  I filed a Chapter 7 Bankruptcy on his behalf.  We were able to wipe out about half of the tax liability through the Chapter 7 Bankruptcy.  We were able to obtain a payment arrangement with the IRS for the discharge of the other half of the liability.  He is paying a small percentage of the amount owed back to the IRS over a period of five years in exchange for a release of the liability at the end of the five years.  He was very happy with these results.  The discharge of tax liability must be determined on a case by case basis through a detailed analysis.