Generally, in order to convert an income tax claim from priority status to a general unsecured claim eligible for discharge in bankruptcy, an individual must satisfy the three-year rule. That is, the filing of bankruptcy must occur more than three years from when the tax was due, including any extensions. If the debtor timely applied for an extension, the due date for the extension becomes the operative date even if the return is filed before or after that date.

However, due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15, 2020. Consequently, any request for an extension must have been filed by July 15^th to obtain the automatic extension to October 15^th. The IRS issued guidance regarding the effect of this postponement on the timing of refund claims for 2019 in Notice 2023-21 but left out any mention of its effect on the 3-year rule in bankruptcy for converting an income tax claim from priority to general unsecured status.

Even without any explicit guidance, it can be argued that if a taxpayer, who has not filed for an extension of time to file their 2019 return, the 3-year rule should still be satisfied by April 16, 2023, even though the IRS issued the global extension under the emergency rules through IRS Notice 2020-18. However, to ensure there is no question as to the dischargeability of these income tax claims, we caution all to wait until July 16,2023 (unless there was an extension to file on October 15, 2020, in which case one must wait until after October 15, 2023) before filing for bankruptcy, particularly because most bankruptcy courts  prohibit debtors from voluntarily dismissing bankruptcy to wait until these tax dischargeability timing rules are met. In re Hammerer 18 B.R. 524 (Bankr. E.D. Wis. 1982).