topic Re: Tax lien in Rebuilding Your Credit

Tax lien

Deco0406 — Tue, 23 Dec 2008 19:29:44 GMT

The IRS has just put a tax lien on me. How much will my score go down? I think I can have it paid off within a year. Will I be able to get a mortgage after it is paid?

Re: Tax lien

Anonymous — Thu, 25 Dec 2008 10:38:33 GMT

A tax lien will have a huge impact on your scores.

Is this already reporting? Call the IRS and see if you can enter into a payment plan. If you do that maybe they will not report it.

I can not answer the question about a mortgage. I am sure it would depend on the lender.

Re: Tax lien

Anonymous — Thu, 25 Dec 2008 17:29:17 GMT

A lien is a lien, it is not reported by the entity that filed it, but by the recorder of deeds. The IRS can't do anything about it after they file - they are not responsible for reporting.

Re: Tax lien

Anonymous — Thu, 29 Mar 2012 14:25:35 GMT

Something to remember, once you pay the lien off, you need to go to the Clerk of Courts and pay the clerk's fee to have the lien marked as cleared in your public record. Then you should get notarized copies of the document showing the lien as cleared and send them to the credit reporting agencies. Then in about 7 years they will drop off your credit reports.

I had a lien from 20 years ago that I had paid off 20 years ago that I didn’t know was showing up on my credit report till I tried to buy a car about 4 years ago. They showed me the credit report and I was dumbfounded. I assumed that when the lien was paid it would clear automatically. I had to go thru the steps listed above and we’ll see if they’ll go away in three more years.

Re: Tax lien

RTOrockstar — Thu, 29 Mar 2012 15:56:04 GMT

The IRS can and will remove tax liens after it's paid off or if you're entered into some kind of payment plan with the IRS if you fill out the right forms. It's not automatic, they make you work for it. Google it and you should come up with what form you need.

State tax liens are another story.

Re: Tax lien

Anonymous — Fri, 30 Mar 2012 11:53:26 GMT

Tax Liens can have a huge impact on your score. There are several ways to resolve it though. Recent [02/2011] changes in the IRS Regulations allow for a withdrawl of the lien after fulfilling several requirements. It is not automatic, you must submit a Form 12277 'Application for Withdrawal of Fled Form 668(Y), Notice of Federal Tax Lien.

Requirements are that you must be current on all returns, have entered in to a payment plan [Form 9465, Installment Agreement Request] and had 3 payments post to your tax liability. The withdrawal will be approved once these points have been covered. A letter of withdrawal is sent to you and the county recorders office where the lien was filed. Once the withdrawal has been filed, the lien can be removed from your credit report by mailing a letter with the notice of withdrawal that will be sent to you by the IRS.

Withdrawal — Removes the public notice and assures that the IRS is not competing with other creditors for your property.

I am currently in the process of doing just this and will touch base when completed in about another 30 days. It is not a quick process. To get the payment plan, it took me over 5 months and to get the 3 payments, well another 3 months.

If you have questions about the process, you may contact your Tax Advisory Group menber directly. To find the Tax Advisory Group contact information, refer to Form 4235 at irs.gov

Good luck,

Re: Tax lien

JonStur — Fri, 30 Mar 2012 12:24:52 GMT

Don't know about federal, but I have had State liens a few times. After paying it off I paid a fee to the Clerk of Courts to have them remove it from my credit report and each time it was removed within a month without me having to send paperwork to the CRA's. I'm in Cleveland so your municipalitie's Courts may or may not be as diligent.

Re: Tax lien

thankfulheart — Fri, 30 Mar 2012 14:03:23 GMT

I'd like to know more about how you managed to get an OH tax lien off your CRAs as I have been grossly unsuccessful. Mine was filed 12/2007, paid 3/2008, but I didn't file the paperwork with the clerk of courts until 11/2008. It still shows on all 3 CRAs as "released", but I can't get it off for anything.

Re: Tax lien

Anonymous — Wed, 04 Apr 2012 18:39:54 GMT

@rstevens56

I was under the impression that negative items in your credit report, I assumed this would include a lien, would drop off the report after 7 years. Yours happened 20 years ago. Why do you have to wait another 3 to get it off your record, even if you requested removal 4 years ago, the time had been served, shouldn't that been dropped right then?

Namaste.

Re: Tax lien

Anonymous — Wed, 04 Apr 2012 21:08:21 GMT

I have to disagree about the IRS removing a tax lien once it is paid. My husband and I had a tax lien in 2004, which was paid within 4 weeks of being placed. It is still on our credit report.

Re: Tax lien

rckstrscott — Wed, 04 Apr 2012 21:21:35 GMT

@Anonymous wrote:
I have to disagree about the IRS removing a tax lien once it is paid. My husband and I had a tax lien in 2004, which was paid within 4 weeks of being placed. It is still on our credit report.

They have changed their stance in the last year... you are going back to 2004... you should research how to remove an IRS tax lien and you can probably get it removed now..

-scott

Re: Tax lien

thankfulheart — Wed, 04 Apr 2012 21:40:23 GMT

If a lien is UNPAID (meaning, the "receipt" paperwork was never filed with the courthouse), it can report forever (or 10 years?)

As far as the IRS, it won't automatically come off. You have to file a form with the IRS, they will send you a withdrawal which you then have to send to the CRAs. It's a new rule and not automatic (that would be too easy, donchaknow).

Re: Tax lien

Anonymous — Thu, 13 Sep 2012 06:02:19 GMT

This is helpful information. Thank you for posting.

Re: Tax lien

chally — Mon, 18 Feb 2013 04:38:21 GMT

As stated earlier, Form 12277. Takes a good 60 days from sending it in to IRS to them responding and CRA removing item. But you have to be current with returns and no outstanding balances.

Re: Tax lien

Anonymous — Mon, 18 Feb 2013 19:03:12 GMT

After reading this I decided to call the state office and see if I can pay a fee to have the state remove the information from my credit report. (My state taxes are now paid in full). The young lady said their office cannot do it but that she did hear of it being done and to call the courthouse. I looks like the court is closed today because it's President's day. I will call the courthouse tomorrow and see if I can pay to remove the paid tax lien from my credit report.

Thanks for all the info. I would never have thought to do that. Will post my results.

Re: Tax lien

Anonymous — Wed, 20 Feb 2013 04:39:31 GMT

Hmmm.... the lady at the courthouse told she's never heard of that but I'm thinking someone knows something. Why am I hearing from people that it's been done? I'll make a note to talk to a different person in the office tomorrow. Maybe I'll call during lunch or something (or see if I can find anything out online).

Re: Tax lien

Anonymous — Sat, 27 Sep 2014 17:03:08 GMT

@Anonymous wrote:
Tax Liens can have a huge impact on your score. There are several ways to resolve it though. Recent [02/2011] changes in the IRS Regulations allow for a withdrawl of the lien after fulfilling several requirements. It is not automatic, you must submit a Form 12277 'Application for Withdrawal of Fled Form 668(Y), Notice of Federal Tax Lien.

Requirements are that you must be current on all returns, have entered in to a payment plan [Form 9465, Installment Agreement Request] and had 3 payments post to your tax liability. The withdrawal will be approved once these points have been covered. A letter of withdrawal is sent to you and the county recorders office where the lien was filed. Once the withdrawal has been filed, the lien can be removed from your credit report by mailing a letter with the notice of withdrawal that will be sent to you by the IRS.

Withdrawal — Removes the public notice and assures that the IRS is not competing with other creditors for your property.

I am currently in the process of doing just this and will touch base when completed in about another 30 days. It is not a quick process. To get the payment plan, it took me over 5 months and to get the 3 payments, well another 3 months.

If you have questions about the process, you may contact your Tax Advisory Group menber directly. To find the Tax Advisory Group contact information, refer to Form 4235 at irs.gov

Good luck,

Sorry to bring this old thread up but I have 3 tax liens that have been "released" after I did finally file my taxes and they realized I owed no money.... any have exprience with Florida Tax liens? Would they remove it for me?

Re: Tax lien

Anonymous — Sun, 28 Sep 2014 01:51:00 GMT

I would like to join in on this. I just paid two state tax liens in Philadelphia and 1 was satisfied a few weeks ago in which I recieved the letter from the Phila prothonatary Office. Apparently I have 1 more state tax lien that's $1,800. that i do not have the funds for presently. Is it possible to have the 3 liens that were paid removed from my CR or would I have to wait until the last one is paid?

I am also in a payment arrangement with federal Income tax and on a payment plan for the last four months. This should be paid in about 12 months.

I am planning on going for a mortgage when my credit score gets up to 620-640. Currently the highest score of the 3 bureaus is 587. By payment the 3 tax liens will this impact my current credit score once the bureaus see that they have been satisfied?

Re: Tax lien

Anonymous — Mon, 29 Sep 2014 03:21:02 GMT

If you can get them removed it would be better. I've seen people jump up about 100~ points after getting them removed. Try your best to do so and refer to IRS Form #12277

Also are these STATE TAX LIENS or Federal Liens? And what kind of taxes did they file the liens for?

@Rickdoc1 wrote:
I would like to join in on this. I just paid two state tax liens in Philadelphia and 1 was satisfied a few weeks ago in which I recieved the letter from the Phila prothonatary Office. Apparently I have 1 more state tax lien that's $1,800. that i do not have the funds for presently. Is it possible to have the 3 liens that were paid removed from my CR or would I have to wait until the last one is paid?

I am also in a payment arrangement with federal Income tax and on a payment plan for the last four months. This should be paid in about 12 months.

I am planning on going for a mortgage when my credit score gets up to 620-640. Currently the highest score of the 3 bureaus is 587. By payment the 3 tax liens will this impact my current credit score once the bureaus see that they have been satisfied?

Re: Tax lien

Anonymous — Mon, 29 Sep 2014 03:27:19 GMT

It looks like if its a Federal lien you are elgible for the fresh start program BUT I don't know the difference between a State lien and a Federal lien... im trying to figure mine out right now. Could someone tell us the difference? People seem to say its two different things?