Attempting To Dispute Fed Tax Lien

[Crossdivided]

Ok, so this one is kind of complicated, so I will attempt to include every piece of information. I snail mailed the disputed to the 3 CRAs yesterday, including supporting documentation. Im pretty much just looking for any advisement/experience/input whatsoever.

In 2009, the IRS filed a tax lien for 35k, which is of course on all 3 CRs. The amount AT THE TIME was accurate, with 3 seperate tax years being included on the lien (2002, 2005, 2006). The vast majority of the debt was 2006 (the other 2 years maybe comprised 4k of the total).

The 2006 amount came from an Auto Under Reporting action, as I had not filed correctly (I didnt know certain income needed to be included, then offset with a schedule A). This was technically my fault, not the IRS's.

Last year, I requested a "AUR Reconsideration", which came back in my favor. This reduced the debt from 30k ish to $1065.00. It basically gets back dated and they remove all the fees etc associated with the original amount...so technically the 30k was NEVER OWED. At that time my total debt was 7.5k. I AM making attempts at paying this off, but I wont qualify for the lien removal after 3 payments since ive defaulted on a previous installment agreement.

I spoke in person to the local IRS office about getting the lien changed to reflect the correct amount, which they more or less responded "itll be removed when the debt is paid". (YES I know that its the same damage regardless of amount to FICO, but still the entry is not accurate).

So, as i said, I sent off the disputes yesterday (only disputing the AMOUNT). Since the reporting agency is my county clerk, im guessing thats where the dispute is sent, of which they will simply pull up the lien in the records and respond as "verified" (can already see THAT coming). I suppose I could turn around and MOV the CRAs, and the clerk would have to verify the debt with the IRS, which of course the IRS cant verify since it "never existed in the first place".

If THAT doesnt work, i suppose i could ITS the CRAs, stating "look i gave you the verification FROM the IRS stating 'we made the following changes to 2006' and showed you on the lien that the amount you are reporting CAME from that year...so you are KNOWINGLY continuing to report false information after I have proven otherwise...etc etc".

Maybe hit up the county clerk BEFORE the dispute gets there with this supporting documentation?

Soooo, think Im barking up the wrong tree here?

Any advice/comments/experience would be much appreciated.

[Crossdivided]

By "barking up the wrong tree" i mean tax lien disputes just DONT get won without the irs withdrawing it. ie completely wasting my time.

Also, I understand that tax liens dont "update", as in if i have paid 25k of it and NOW only owe 7.5k. If that were the case I would understand the policy. My  stand is that the amount posted on the lien was 'reconsidered' and 'backdated'. No idea if that ultimately makes a difference, its just an inaccurate amount on CR, so I thought I would treat it as any other entry that would be reporting 'inaccurate information'.

[RobertEG]

It appears that you filed your dispute through the CRA, as opposed to a direct dispute with the furnisher?

That, in my opinion, would be a mistake, as the CRA's  e-OSCAR process usually omits forwarding of supporting documentation to the furnisher.

To ensure that the furnisher receives all supporting documentation, you can file your dispute directly with them under FCRA 623(a)(8), and bypass the CRA.

In the dispute process, the CRA is required to forward a copy of the dispute to the party who reported the disputed information.

The furnisher is then required to conduct a reasonable investigation of its accuracy, and either affirm its correctness or update to correct.

The CRA then, usually based entirely on the response from the furnisher, must make the final determination and forward the results to the consumer.

In verification, the furnisher is not required to send documentation or prove the accuracy of the dispute reporting.  Their determination must be based on a good-faith interpretation of the results of their investigation.  The CRA is not an aribtror of conflicting facts.

If the furnisher either does not conduct a reasonable investigation, or the results of their investigation reasonably show to them that their reporting is inaccurate, and yet they verify the accuracy, they do so at their future peril of knowingly misrepresenting their findings.  You need to get the facts befor a court to get that determination.

Should the CRA affirm accuracy based on the response from the furnisher, yes, you can request that they provide their method of verification, which under the statute requires that they provide the name and contact address of those they consulted.  Again, the MOV process will not require the CRA to intervene in the interpretation of the facts.  CRA reliance on the investigative findings of the furnisher is not, in my opinion, a violation of their reinvestigation obligation.  You can, of course, always ask a judge to find otherwise.

[electra]

I hate to say this but you may have shot yourself in the foot.  What was the supporting documentation you sent the CRAs?

The courts are not the furnishers of information to the CRAs.  (If you want to verify this, simply call your county recorders office and they will confirm.)  It is a bit of a mystery where the CRAs get this information from.  The cases I've read about where people submit an MOV, the CRAs give very vague answers about where this information comes from. (Which is BS IMO.) As best as I can tell,  the most likely source of lien information is LexisNexis.  In some cases they (LexisNexis) even have a direct relationship with the county court.  (I had to pay a LexisNexis fee to get a copy of a lien in one particular county.)That is more likely to be the case in a large metropolitan area.  In smaller counties, I believe LN hires contractors to gather the Public Record information from the courts.  

I would recommend that you pull your LexisNexis Full File Disclosure report. If it's not in there, they may not be able to validate.  However, if you've sent them documentation yourself...then that's probably all the verification they need.  

I have tried an experiment where I disputed 2 state tax liens which do not appear on my Lexis Nexis report and additionally are filed in a small county where the only way to get access to the lien is to go in person and pay a fee or to send a letter with a check (which takes about 2 months to get a response to).   I included an MOV in the dispute.   I also called the county recorder and talked to him about this.  He confirmed that they do not share information with the CRAs and was curious himself about how they got this info.   If these are removed then I'm going to try disputing the one that DOES appear on LN.  If that comes back as verified then...voila...I have my answer as to where they are getting this info.  

[electra]

Forgot to add...one thing I would try if you haven't already is to contact the Taxpayer Advocate and see if they can plead your case for withdrawal. 

[Crossdivided]

The verification I sent was a letter from the IRS stating "we have refigured your 2006 tax to 1065.00 from 32,965"...and it gives all the math for the reversals incuding fees and int, etc. The bulk of the amount listed on the lien came from that year's original incorrect amount.

I think im going to take the following approach:

Talk to the county clerk and try to find out who the information furnisher is, and supply them with the same verification. At that point, remind them of FCRA:

623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. 1681s-2] (A) Reporting information with actual knowledge of errors. A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or consciously avoids knowing that the information is inaccurate. (B) Reporting information after notice and confirmation of errors. A person shall not furnish information relating to a consumer to any consumer reporting agency if (i) the person has been notified by the consumer, at the address specified by the person for such notices, that specific information is inaccurate; and (ii) the information is, in fact, inaccurate.

I suppose the best I can hope for is that the information furnisher isnt sure what to do, and just doesnt answer the dispute.

Also, if/when it ends up 'verified', i could MOV and/or even ITS the CRAs...at the end of the day the CRAs would be KNOWING continuing to report the inaccurate information, if they do so after I show them on the 668(Y) (the lien) that 2006 is included, AND I verify that the 2006 amount was revised after the lien was filed.

I dont know...maybe im reaching here. Input?

[electra]

DO NOT give the CRAs the notice of lien (668 Y).   You will have handed them all the information they need to continue reporting it for 10 years from the date it was filed or 7 years from the date you pay it.  Disputing it after that would be a waste of time until such time it is withdrawn.  Whether or not the amount on the notice of lien is the current amount owed is completely irrelevant.  A notice of lien was filed for X amount and as long as the CRAs are reporting the amount which is on the notice of lien and the lien has not been withdrawn, then they are reporting accurately.  Neither they nor the furnisher of the information have an obligation to change their reporting based on the current amount owed for a notice of lien. They are reporting on a public record.  This is what is in the Public Record.  I think you are going in the wrong direction on this.   

The Court will probably not tell you how the information gets to the CRAs because they don't know themselves as they are not the ones reporting it. If it comes back as verified I would try an MOV but my prediction is that they will give you a very vague answer, not naming the actual source.  (And if they do...PLEASE let us know who they name.)

Do you have an actual copy of the 668 Y?  Have you very closely compared it to what is being reported?   If there is a discrepancy between what is on the notice of lien and what is reported (date, name, amount) then that would be the basis of filing a dispute...your hope being they would be unable to verify/update and would delete.  

I think your best chance is really to work with the Taxpayer Advocate to get the lien withdrawn under Fresh Start.    

Sorry, I know it stinks. Believe me...I have 3 whopper federal and 3 state.  Good luck.

[Crossdivided]

No, I didnt supply the CRAs with the 668(Y).

I think youre right, Ill just wait for a verification with the CRAs and try a MOV.

The information is correct for the time it was reported, its just that the IRS reversed itself on the amount. I thought about a 12277 citing this information, but the debt will be PIF sometime this year, and ill be able to remove it after that just from the withdrawal. No point waking a sleeping giant (assuming the IRS EVER sleeps...).

No, im not trying to be slick and get them on a technicality, the amount just straight up is incorrect. it never was technically correct, since they reversed their decision on the amount. but yes im not trying to burn any bridges...if the dispute or MOV doesnt work, ill just let it lie until removal via PIF.