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Is it possible to get a tax lein removed after BK

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mlibby
Regular Contributor

Is it possible to get a tax lein removed after BK

I have a tax lein on my reports that was covered under bankrupcty is it possible to get it removed? its showing up two negative items when applying for credit crards and being declined directly on that reason alone

Message 1 of 5
4 REPLIES 4
StartingOver10
Moderator Emerita

Re: Is it possible to get a tax lein removed after BK

I am assuming you are referring to your Federal Tax debt (income taxes) and not property taxes. Check with your attorney to see if your taxes met the criteria for dischargeablity. Taxes are a special case in BK. They are not dischargeable unless the tax meets certain criteria below: I have copied a portion from this link, but to to the link to read up on the additional details.  http://www.journalofaccountancy.com/Issues/2010/Aug/20102591.htm

 

NOT ALL TAX DEBTS DISCHARGEABLE

To be dischargeable, individual income tax liabilities must meet the following “mechanical” rules of 11 USC §§ 523(a)(1) and 507(a)(8):

 

  • More than three years must have elapsed since the tax return generating the liability was due, including extensions. Various acts such as prior bankruptcies, collection due process (CDP) hearings, innocent spouse relief and tax assistance orders can extend the three-year time frame.
  • The tax return must have been filed more than two years earlier than the bankruptcy petition (generally applicable to late-filed returns). Note, however, that IRS-prepared “substitute for returns” are not considered filed returns for this purpose, and thus a tax liability assessed from them would not be subject to discharge (IRC § 6020(b)). Therefore, it is almost always advisable for the client to file all delinquent returns and, if possible, let the mechanical time frames pass before the bankruptcy petition is filed.
  • At least 240 days must have elapsed since the date of an IRS assessment (generally applicable to audit adjustments and amended returns). This time frame is extended by an OIC
Message 2 of 5
mlibby
Regular Contributor

Re: Is it possible to get a tax lein removed after BK

sorry i should of said they where state taxes and discharged already just trying to get it removed from my credit report

Message 3 of 5
ezdriver
Senior Contributor

Re: Is it possible to get a tax lein removed after BK

Short of getting the State to withdraw the lien, I don't know of any other way to have it removed from your credit report. A satisfied lien can be vacated but an open lien has to be withdrawn by the party that place it.

 

I had IRS taxes discharged in my Ch 7 but then had to convince the IRS to withdraw the lien ... and they did. I then had to take their documentation to my county recording office and have it recorded. Then I took the proof of recording to my loan officer [I'm buying a house] and they updated my credit report.

 

The process I used with the IRS is likely the same process that you need to use with your State.

Message 4 of 5
Longroad
Established Contributor

Re: Is it possible to get a tax lein removed after BK

The only way i know of to get an IRS lien removed is to file a Form 12277 and ask for the lien to be withdrawn. Look it up on the IRS website it has been made easier under the Fresh Start Program.  I got nothing on the state. Good luck. 

Message 5 of 5
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