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State Tax Lien - Removal Questions

OhMyWhatHaveIDone
Frequent Contributor

State Tax Lien - Removal Questions

Hi All,

I started my journey 2 years ago. Had scores in the mid 500's. Now, I am mid 700's with only 1 derog. Which is why I am here...

 

I read online that all 3 CBs have agreed to remove judgements and liens to prevent nuisance court appearances. Please see below for a common article found on this subject. When I read the below I pulled up my state tax lien and realized that my lien doesn't have the proper information. Out of the 4 pieces of data required, only my name is correct. Incomplete SS#, wrong address and no birth date. My questions are:

1) Has anyone else used this tactic to remove a lien, and been successful?

2) Should I simply file an online dispute due to data inaccuracies? If so, do you only get one attempt at doing this? I have the means to pay someone to do this for me  (lawyer) if that is a safer bet. Thoughts?

3) Is all this legit, meaning, it looks as if this new policy was put into place over the recent summer. I have been building my portfolio and haven't been paying attention to this subject. My scores are solid now, but if I were to get these removed I would have nothing negative on any of my reports.

 

 

As a result of litigation encountered by the three bureaus, Experian, Equifax, and Transunion have all announced they will be removing tax liens and civil judgments from credit reports where incomplete information exists, according to the Consumer Data Industry, a trade group that represents them.

The Consumer Financial Protection Bureau issued a report in March 2017 citing problems with credit report accuracy, specifically the quality of the credit information contained in the 3 bureaus’ credit data. Issues included improving standards for public-records data, notably, making sure they used basic identifying information: a person’s name, address, social security number, and date of birth.

 

 

Message 1 of 7
6 REPLIES 6
RobertEG
Legendary Contributor

Re: State Tax Lien - Removal Questions

The removal of tax liens that do not include certain minimum information to associate the lien with the named consumer is part of the joint CRA policy statement that is currrently set forth in their recent "National Consumer Assistance Plan." 

 

The CRAs have agreed to remove tax liens from credit reports they issue if the public record does not show the consumer's name address, and at least the consumer's date of birth OR their social security number.  It does not require both DOB and SSN.

 

If you wish to request removal based on lack of the minimum public record information, you can do so by informal request to the CRA, citing their internal policy in the National Consumer Assistance Plan.  A formal dispute could be filed, but I would first request an informal removal, thus avoiding problems that can arise with temporary score impact of a formal dispute, and lack of timely CRA removal of a pending dispute flag.

Message 2 of 7
OhMyWhatHaveIDone
Frequent Contributor

Re: State Tax Lien - Removal Questions


@RobertEG wrote:

The removal of tax liens that do not include certain minimum information to associate the lien with the named consumer is part of the joint CRA policy statement that is currrently set forth in their recent "National Consumer Assistance Plan." 

 

The CRAs have agreed to remove tax liens from credit reports they issue if the public record does not show the consumer's name address, and at least the consumer's date of birth OR their social security number.  It does not require both DOB and SSN.

 

If you wish to request removal based on lack of the minimum public record information, you can do so by informal request to the CRA, citing their internal policy in the National Consumer Assistance Plan.  A formal dispute could be filed, but I would first request an informal removal, thus avoiding problems that can arise with temporary score impact of a formal dispute, and lack of timely CRA removal of a pending dispute flag.


Robert,

First, Thank you for always helping us out. Can you help me with describing how I should actually make an "informal" request to have this removed? I am not sure if you mean - Call, write, etc. Any help guiding me through this process will be greatly appreciated. 

 

Sincerely,

Almost There

Message 3 of 7
RebuildisaPITA
Contributor

Re: State Tax Lien - Removal Questions

OP,

If you don't mind me asking, how did you pull your state tax lien?  My wife has both a federal tax lien and a state tax lien in her credit report.  She's going back to school right now to finish her degree so we've decided to try to work on her tax liens.  I've been reading about this new rule about tax lien removal law and am still somewhat confused about it.  Does it apply only to paid tax lien?  Also, I would love to hear what RobertEG have to say more about his topic.

Good luck OP!!!

 

BTW, if anyone has any recommendation on how to start dealing with tax lien, please chime in.  We're thinking of getting a tax attorney to work on the balance reduction and start a payment plan.  Her fed tax lien is currently at a rediculous amount, $ 36K due to fees, interest, and penalty charges incurred since 2001.  Her state is only  around $ 5K plus.  I'm thinking of paying that off first but a bit concern that if we paid off the state and not the fed, the government wouldn't leave us in peace until we are more financially stable. 

Message 4 of 7
OhMyWhatHaveIDone
Frequent Contributor

Re: State Tax Lien - Removal Questions

Hi ReBuild,

I went to the county where it was filed (Online) and did a record search. The actual lien is public record and easily found. On my lien there clearly isn't the required information. Only my name is correct. Had they used the correct address my lien (of less than $2K dollars!!!!!) would have been paid if I had received the letters. 

 

Make sure you get into a payment arrangement with the fed before the amount exceeds $50K. I had $44K in back taxes that I was put on a payment plan for 2 years ago. I am going to pay it off in February. Had I been over the $50K mark the process to get on a payment plan would be very painful and most likely not possible. It's basically just forms to be filled out below $50K. Above you have have them pick the corn out of your personal life... Robert should pop back in shortly. If he doesn't I'll PM him and ask him to catch up on this. He is one of the most knowledgeable people in the Rebuild forum.

Message 5 of 7
RobertEG
Legendary Contributor

Re: State Tax Lien - Removal Questions

Tax Lien Terms:

  • Unpaid — A tax lien has been issued due to unpaid taxes, and the debt has not yet been paid. Tax liens with this status can remain on your credit reports forever.  See FCRA 605(a)(3).
  • Paid or Released — The tax owed has been paid, so the lien (government claim on property) has been released. Tax liens with this status will usually remain on credit reports for 7 year from the date when the lax lien was paid.
  • Withdrawn — The tax authority has withdrawn the public record of the tax lien. Tax liens with this status are removed from the public record, and thus can be removed from credit reports.

There is a way to have paid federal tax liens removed from your credit reports prior to 7 years from the date when the lien is paid (released0. In 2011, the IRS introduced the Fresh Start Program, which contained a new policy regarding the way the IRS handles federal tax liens.

Under this program, if a taxpayer pays his or her outstanding tax bill in full, then the IRS will allow for the lien to be withdrawn upon request by the taxpayer. There is even a chance for certain eligible taxpayers to have their federal liens withdrawn by the IRS once they have entered into a payment arrangement (agreeing to pay the tax obligation in full) and have made a minimum of 3 payments.

 

Tax lien withdrawal doesn’t happen automatically. If you meet the above criteria, you must request a withdrawal from the IRS. You do so by completing and sending to the IRS Form 12277, Application for Withdrawal of Notice of Federal Tax Lien. If the IRS grants your request, it will record Form 109169(c) (Withdrawal of Filed Notice of Federal Tax Lien) with the county recording office and send you a copy.

There’s one more step in the process. The credit reporting agencies are required to periodically search public records and report accurate information on your report (in which case they should pick up on your tax lien withdrawal). However, you do not need to wait for them to do this.

You can alert the CRAs of your tax lien withdrawal. You can informally send the CRA the Form 109169(c) or by following the normal process for disputing an item on your credit report.  I recommend first sending an informal request, along with a copy of the withdrawal notice, to the CRA, thus avoiding a formal dispute that can temporarily effect credit scoring.

 

The IRS’s tax lien policy does not apply to state tax liens. Still, if you have paid a state tax lien then you can always request a withdrawal from your state. While there is no guarantee that you will receive a withdrawal of a state tax lien after it is paid, it certainly can’t hurt to ask.

If you are eligible to have a state tax lien removed from your credit report, you can follow the procedure below to attempt to have a it removed from your credit reports. Otherwise, you will need to wait until 7 years from the date of release for the lien to be removed from your credit reports.

Paying your tax lien will immediately release it, but this does not automatically withdraw it from your credit report. You must be meet certain conditions to be eligible for an early withdrawal.

 

The "National Consumer Assistance Plan" is a new policy  statement by the CRAs that includes removal of tax liens, paid or unpaid, from credit reports based on the lack of adequate identifying information in the public record posting of the lien.  It has grown out of the a pending lawsuit in in the federal eastern district of Virginia, titled Jenkins v. Eq, et al, which is challenging the CRA internal procedure for obtaining and posting of public record information in consumer credit reports.

Message 6 of 7
OhMyWhatHaveIDone
Frequent Contributor

Re: State Tax Lien - Removal Questions

Thank You Robert!

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