Tax Liens and How They Work

[Anonymous]

  Now that I have established myself to "okay" credit,

   I am attempting to clean up my fiance's.

Good news? 3/5 of his bad accounts fall off before Nov 2017, another is due to fall off as of June 2016. We can wait these out.

I might try goodwill letters, but we've managed with both of us having poor credit for so long, waiting another year and a half for his to clear up isn't going to make much of a difference.

The one baddie I am worried about is a Massachusetts state tax lien from 2009. He worked in the union and was laid off during the winter months. The state claims that no state taxes were removed from his unemployment check during that time. Whatever - old news. I know nothing about back taxes.

  I read there is a SOL of 10 years. Does that mean it will fall off in 2019 if he has had no contact? Is there anything else to be done besides wait?

  While we play the waiting game, would it be beneficial for me to put him as AU on my good accounts? Would that report for him? Should we try and get him a CC (like Credit One or secured) in his own name now to establish an account in good standing?

Thanks!

KW

[RobertEG]

State tax liens have an exclusion period of 7 years from the date the lien is paid.  FCRA 605(a)(3).

If it has not been paid, then ticking of the exclusion clock has not yet begun.

I would advise looking into whether there are any provisions in your state for vacature of the lien (i.e., total removal) based on some provision, such as payment.

While tax liens in Mass have an initial period of posting of 10 years, I believe then can be re-posted.  I would check the statute on extension provisions.

[Anonymous]

In Barnstable County, Massachusetts, the process for creating a tax lien is fairly uncomplicated. First, the tax authorities determine that a taxpayer truly owes taxes that they haven't paid (that they're delinquent in their taxes).

At this point, the taxpayer will receive a letter containing a "notice and demand," which, as the name suggests, gives notice that the recipient owes taxes, and demands immediate payment. It will typically give the taxpayer about 10 days to pay the demanded amount.

If that time period expires, and the debtor still hasn't paid, the Massachusetts tax lien will go into effect automatically, with no further action required.

However, if the federal government does not seek to enforce a tax lien in Barnstable County, Massachusetts within 10 years of imposing it, federal law dictates that the lien automatically expires. This is effectively a statute of limitations on a tax lien, meant to encourage the federal government to collect its taxes in a reasonable period of time, and ensure that property is not encumbered by a lien forever.

^^ This is what I was able to find. I guess I need to find out if they can refile after 10 years.

[RobertEG]

Why would the federal government be involved in seeking payment of a state or local tax?

The lien is placed by the state/local government, not the feds.