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!
Starting Score: 595
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! 
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.
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!
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!
