Credit Repair Articles

Removing A Tax Lien

Credit Repair Articles - Credit Repair

If you want to remove a federal tax lien from your credit report, the first thing you need to realize is that the IRS isn't going to remove or release the lien until it has been satisfied (paid) or has become unenforceable under the law.

The first step, then, is to make sure that the lien is either withdrawn or released.

Release Of A Federal Tax Lien

The statute of limitations on a federal tax lien is generally 10 years under 26 U.S. Code Section 6502. This means that a tax lien should usually be released automatically after 10 years.

If you don't want to wait 10 years, the first step in getting a federal or state tax lien off of your credit report is to satisfy the lien by either paying the amount in full or using an Offer In Compromise to attempt to settle the amount due with the IRS.

An Offer In Compromise doesn't guarantee that you will reach a settlement. Depending on your circumstances, you may still be held responsible for the full amount. If you are able to reach a settlement agreement, the Offer In Compromise won't affect the tax lien until the amount agreed upon has been paid in full.

After the amount is paid and all other fees related to the release of the lien have been paid, the lien can be released.

Withdrawal of A Federal Tax Lien

According to the IRS, a notice of tax lien can be withdrawn under the following circumstances:

  • The notice was filed too soon or not according to procedure;
  • You entered an installment agreement to pay the debt on the notice of lien;
  • Withdrawal will speed the collection of the tax; or
  • Withdrawal would be in the best interest of both you and the government.
    (Source: www.irs.gov)

If there is a circumstance in which the lien is preventing you from making a transaction that would enable you to pay the lien, it could be withdrawn to allow you to make the transaction and, in turn, pay the debt. Again, don't expect it to go away easily, but if you have funds available to settle or can get funds to pay the lien in one way or another, you may have a chance of getting the lien withdrawn or released so that you can proceed in attempting to remove it from your credit report.

The lien will be a matter of public record until paid.

Once paid and released, you can start the dispute process with each of the three credit bureaus. You would start by factually disputing the listing on your credit report with each bureau, and continuing with the dispute process as you would with any other incorrect, incomplete, unverified, or outdated item.

 


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