Manage Old Tax Liens on Your Credit Report Part 1
written by Credit-HQ ExpertAn individual who reviewed his credit reports for the first time ever was astonished by two tax liens displayed on the reports. The tax liens were older than ten years. He was astonished because he had no problem getting loans and even a mortgage.
This individual knew he had sorted out both tax liens a long time ago he didn’t know if he could prove it because he didn’t know where the papers of proof were. To assist him he looked at the IRS publication 594: The IRS Collection Process.
How complicated was it to remove the tax liens from his credit report. Were there any pitfalls to be aware of?
Darren T Misch an IRS problem solver and tax attorney was asked to provide answers for the following questions:
1. What amount of time does the IRS take to discharge the lien from payment or settlement of a tax debt? Explain the procedure.
According to the statue there is 30 days to discharge the tax lien (Internal Revenue Code 6325). But this is often given a miss and it’s not carried out. In such a case a taxpayer can get in touch with the Lien Desk ph (800) 913-6050 or fax 9859) 669-3805. In the Form 668(Y)© Notice of Federal Tax Lien there is a black box in bold, middle of the page, left side. You will read the lien must be refilled by the date found in column (e). If this is not done the lien is dischargeable on appearance. The meaning is if some other lien was not filed prior to column (e) dates, the lien can’t be imposed. The IRS is not keen to give out a release for a lien that has run out.
2. When a lien is released, are the credit agencies routinely informed by the IRS? If not, what must consumers do to ensure their credit files are kept up to date?
At the court where a lien is first filed a Certificate of Release is filed. This is when the credit reporting agencies should become aware of the release. However, it would be best request three authorized copies of the release and you ensure the three credit bureaus get them. The reason is it could take months perhaps years before these bureaus notice the release.
3. You may not be familiar with a tax lien on your credit reports. How do your find out if it’s applicable to you?
You will have to backtrack to each county’s public records office where you have resided from when the Federal Tax Lien was issued. This office goes by different names depending on the state. In California you will find the Office of the Recorder. In Florida you will find the Official Records of the Clerk of Circuit Court. Certain states do have records online, some do not.
Click here to see Part 2: Manage Old Tax Liens on Your Credit Report Part 2
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