Tax Lien and Offer in Compromise

[TryingVeryHard]

I owe the Federal government 5000+ because of the unpaid self-employment tax (yr. 2005). I have entered into a settlement agreement twice already but after paying 1-2 payment to each, I called and ask that collection be halted because of unemployment.

They have not filed lien so far, but have told me that they have the right to do so.

Question, while under agreement, is it likely that they will report lien to CRA? And also, is it advisable to apply for Offer In Compromise agreement?

I have worked so hard to fixed by credit and now on my 610-640 FICO scores. I know that lien can make it low.

I just recently got employed and do not know if I can still continue the last agreement I entered to, and which I have not paid 2 months already.

Just sharing this story is giving me headache again.

Message Edited by TryingVeryHard on 12-16-2007 02:49 PM

[Anonymous]

The decision to record a lien appears to be discretionary; probably more likely if there is concern about your ability to pay.  I would catch up on the installment agreement.  You will buy some time by filing an Offer in Compromise, but you may raise concern about your ability to pay when you provide information on your financial situation.

[braznyc]

I'm new at the whole tax lien situation, but I promptly paid off the state, and they were far less flexible with me than the IRS. I would call the IRS see if the rep you're speaking too is in a good mood, and try to work something out with them. I wouldn't let the payment agreement you did with them continue to go unpaid. If I've learned anything it's not sit and let things go, just call them see if they will accept a lower payment for now, until you can go back to the agreed amount, just my suggestion. I even worked out a similar plan with the state, before I saved all the money to pay them off, so I know the IRS would be open to it. But if you continue to miss payments you may forfeit your agreement, and you should hope that they don't say "we must file liens on the amount owed to do a new one" this was what I was told by the state because I didn't honor an agreement, I did what you're doing by waiting instead of just calling. So again call them, talk to them, they want their money, but they're humans too and if you're they see you're trying in good faith, they'll work with you. Good luck!

[Minnie]

I got behind on my installment agreement with the feds. I contacted them and was able to get it re-instated by paying what was due at the time. I asked if a federal tax lien would be filed -- they said as long as I pay, it will not be filed. I would call them asap, though, especially since you have been late previously. I have spoken to two different people there, and they were both very nice. Nothing was reported about my lates, or my installment agreement with them...thank goodness. Remember, too, that taxes are a high priority debt -- you should put them before other unsecured debt...good luck!!

[Anonymous]

Good luck!  They hit me w/lien last year when I was not working because it was over $5k...come to find out that was only for 3 years! 

The lady was MOST rude and unwilling, told me to sell anything i could to pay them...they've added $1800 in interest/penalty in one year, they are WORSE than the worst creditor you can imagine...and to top it off, she told me they won't work with me because I have proven I can EARN the money - what a bunch of crap...

Even if you enter a new agreement, be sure to make your payments while waiting to hear on the OIC, I'm going to get mine filed this week, but she was very specific if I didn't, they'd file a new lien on the other year I owe, and start searching for money...cripes, I am a single Mom w/2 kids and working 2 jobs now, I changed to do the right thing but that doesn't matter, and I don't want to WORK/LIVE to pay this outrageous interest...yes, a little is understandable because I owe, but this is ridiculous, especially when others get a deal or bailed out...

[TryingVeryHard]

I entered into agrement again. 100$ a month. I dont know if i should proceed with OIC. My debt is over 5000, and was for year 2005. They will probably report lien soon, very soon.

My current FICOs range from 610 to 640 for the three bureaus. I am sure lien will make me kiss 500s again or even.

Advice me please. Currently I only pay for 450 Home Depot Account (I pay 20-50$ a month), $200 Credit Card (I pay 20-50 a month), and a deferred student loan $2800 (not payable til May 2008).

Do you guys think I will get approve for loan @ credit union so I can pay this tax first? I am afraid that my score is not high enough.

Thanks

[braznyc]

Did they say they'd report you the lien? If they didn't tell you they would I don't think they will, only if you would've stayed in default, again my experience is different than what I've read from others, the IRS was better to deal with, while the state were real pains. Pay them and don't bother with the rest is my suggestion. If they've lowered your agreement amount I wouldn't do anything more than pay them on time each month and continue to rebuild your credit.

I don't know about a loan, each bank has their needs on the score front, someone else far more knowledgeable would know this. To me the IRS and any taxes reign above CC, but this is me, it seems that they can do far more damage than any CC account can - but again this is just how I feel. The liens will haunt you forever if they aren't paid, and they will contact old employers, current employers, etc looking for money, so just pay them as agreed, anytime you see you can't CALL THEM.

Again good luck.