www.taxprofessionals.com - TaxProfessionals.com
Posted by Taxes Made EZ Inc

Five Steps to Remove an IRS Tax Lien from Your Credit Report

Five Steps to Remove an IRS Tax Lien from Your Credit Report

One aspect of credit reporting rules that can cause more problems than any other is eliminating paid negative listings or, rather, lack of removal. The logic seems to suggest that once you paid off an item, such as a collection account, delinquent credit card, or judgment that it will be removed from your report. However, credit report laws generally don't work that way. Paid off negative items can remain on your credit report for as long as the law allows, even after they have been paid for.

In the past, the same was true for IRS tax liens that were settled; they were going to stay on your report for 7-years. However, the Internal Revenue Service has taken steps to change this. There is now a process to have paid federal tax lien permanently removed from your credit report.

Step 1: Complete the IRS Form 12277

The IRS form 12277 serves as a request for withdrawal of the initial tax lien. Before filling this form, try to locate Form 668 (Y) sent to you by the IRS as a notice of your initial tax lien. This can help speed up the process. However, you can fill out this form if you don't have Form 668(Y).

For question 11 of the form, select the option that says:

"The taxpayer or his lawyer acting on behalf of the taxpayer considers the withdrawal to be in the interest of the taxpayer and the government."

For question 12, enter "Fresh Start Program."

Step 2: Submit Form 122277 to the IRS

Use IRS Publication 4235 to determine which regional IRS office to send your request to. Send your form by registered mail.

Step 3: Wait for the IRS to respond.

After 30 to 45 days, the IRS will contact the court where the lien was filed to advise them to withdraw it. A copy of this notification will also be sent to you.

Step 4: Dispute liens with credit bureaus

Dispute a tax lien with Experian, Equifax, or TransUnion on their respective websites. They will then contact the court where the lien was made to determine if the information is still correct. Since the court has already been notified of the revocation of your lien, they should be able to withdraw it quickly.

Step 5: Final confirmation

Each of the credit bureaus will send you a notification of the end of the dispute. If the lien has not been removed from all or part of your reports, file a second written dispute and include a copy of the IRS notification that your lien has been withdrawn.

Tax liens on your credit report can not only significantly affect your credit score but can also influence a lender to deny you a loan or credit card. It is imperative that you resolve them and remove them from your credit reports as soon as possible. If you have any unpaid collateral, talk to a tax professional to know more about settlement options or your payment plan.



Taxes Made EZ Inc
Contact Member