02-09-2013 03:49 PM
I just received a letter today from the IRS that my request to remove the federal tax lien from my CR has been approved! I can not tell you how awful it has been to have the huge negative lurking around on my report. Here's my story:
Back in 2009, I was working with a tax settlement company (one of the ones you see on TV all the time). This company reeled me in by promising they could reduce the amount of debt owed by submitting an Offer In Compromise (OIC) with the IRS. This process took over 5 months (the rep I had was super incompetent and each time the paperwork was submitted to the IRS it was rejected because some piece of information was either incomplete or missing all together). After month #6, I decided that I no longer wanted to work with this service and went about submitting my own OIC. Low and behold, my offer was accepted after only 1 submission.
During the time the IRS and the tax service were going back and forth, the IRS filed a tax lien. I was not made aware of the lien until after I stopped working with the tax service and also after my OIC was accepted. As soon as I was made aware of the lien, I contacted the IRS who informed me that although an installment plan was now in place, they would not remove the lien until the debt was paid in full. The worse part is that the amount of the lien ($11,268) was more than the OIC settled amount ($7,815). So frustrating!
From 2010 to last October, I had been paying as agreed and was just trying to chip away at the tax debt as much as possible. In researching tax liens, I found an IRS video about a program called the Direct Debit Installment Agreement. The video stated that by signing up for this plan, you can ask the IRS to remove the lien. I immediately contacted the IRS and asked if I could transfer my current plan to the DDIA. I also offered to increase my monthly payment by $100 (hoping to show how serious I was about paying off the debt). They agreed to change me over to the DDIA with the new monthly payment.
After the first payment was made, I submitted IRS Form-12277 (Application for Withdrawal of Federal Tax Lien). I had heard that I should wait 6 months before making the request but I took a chance knowing that I had a good payment history already from the original agreement. I mailed the form on January 10th and received the official response today!
I don't know how much of a difference this will make as far as my scores are concerned but honestly, just having this off my back is good enough for me! I hope this post can help someone else who may be feeling as helpless as I was...there is HOPE!
02-10-2013 02:04 PM
Wow...great news, Congrats! This gives me a lot of hope. My story is somewhat similar. I was paying on a monthly installment plan and the IRS still added a lien back in 2009 for about the same amount as you. I have made three Direct Debit payments already and mailed my request form on 1/29. Patiently waiting on a response (with prayer!) I have never missed a payment and my refunds each year get applied.
At this point I don't even care about my score going up...I am applying for a FHA loan soon and just want it OFF! However....a score jump is always good too! LOL
If you do see a score change let us all know!
02-10-2013 02:33 PM
Congratulations!! That must feel awesome! Come back and let us know how the process goes getting it removed from your reports. Did you include in your withdrawal request that they send the paperwork to the CRAs as well? Also, would love to know the impact on your score. I've got THREE I'm working on getting withdrawn...can't wait to join you!
02-11-2013 02:41 PM - edited 02-12-2013 11:01 AM
Thanks 800_ismygoal. I forgot to mention that after I sent in the lien removal form, I contacted my state's Tax Advocate Office. I told them I had submitted the form but asked if there was any way they could assist me in dealing with the IRS. I think my fast response was in part due to the TA. Good luck on your removal - I'll let you know if my score changes.
02-11-2013 02:43 PM
Thanks electra - I'm going to wait 30 days and if the CRAs haven't changed, then I will send them the paperwork. I know dealing with the county clerk's office is going to take some time so I'll see what happens in 30 days. Good luck with your removals!
02-11-2013 04:02 PM
Thanks for your story. I submitted my form 12277 a week ago and am waiting to hear back. I submitted it with a cover letter and lots of supporting documents including instructions to contact the 3 CRAs with addresses, copies of my credit reports, a copy of the fev 2011 announcement from the irs, copies of my installment stubs, etc. I got the lien in 2006 and set up a payment plan afterwords. The lien was for 5600 and I paid it off finally in june of 2008. Thus i checked the last box on the form. The one that says something like "withdrawal is in the best interests of the Taxpayer and the Government. I am expecting a long protracted battle so it is great to hear of your success. My lien was filed in Cook County, Illinois and I have considered calling the Clerk there but I haven't done so yet....I was informed on my credit report that my lien would drop off by itself in 2016 but i don't want to wait. I challenged it on one report as being too old but they denied me. i expected that to happen. On another credit report it was listed twice. They remove the duplicate record in less than 2 hours after I called them about it. They were very friendly on the phone. This was TU btw... Anyway, I am not expecting to hear back for another month but I will report back when I do. I wrote a cover letter with my form that was very friendly in which I took responsibility for my lien and explained how it was preventing me from getting a better job. I cited an example of being declined for a job as a bank teller and being told that I was declined because of my "credit". I also explained that since my lien my salary has dropped by 90 percent a fact which my tax returns bear out.
I have a firm belief that if i put enough effort into this I can get this lien removed. As for the old bankcard with months and months of 180 and 90 days past due, well that might be a litte harder but I am trying..
02-12-2013 10:59 AM
Good luck dddewdrop - it is so frustrating having a lien follow you everywhere. Keep us posted on your response from the IRS. If they deny your request, reach out to your local Tax Advocate Office and see if they can work on your case directly with the IRS. All the best!
02-12-2013 01:28 PM
Congratulations, celebrate success!
For those interested in score impact, I just went thru the process of successful withdrawal of Federal Tax Lien (Jan 3, 2013), the lien having been released 5 years ago, 11/2007. The 3 CRA's all deleted the lien from CR the first week of Feb (last week), resulting in a TU increase of 14 points and an EQ bump of 6 points, fyi.
02-12-2013 01:31 PM
Thanks chally, good to know. Can I ask if you have any other liens or baddies? I've heard of other reports of pretty big bumps but I wonder if that was due to their being more recent or maybe the last baddie to clean up?
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.