Tax lien

[Deco0406]

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?

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

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.

[RTOrockstar]

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.

[Anonymous]

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,

[JonStur]

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.

[thankfulheart]

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.  

[Anonymous]

@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.

[Anonymous]

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.