How You Should Deal With Old Tax Liens On Your Credit Report

NEW YORK - Aug. 24, 2013 - PRLog -- Here are the concerns about resolving old tax liens and getting tax liens off credit reports, followed by the answers:

1. When you pay or settle a tax debt, how long does it take the IRS to release the lien? What's the procedure for doing so?
The statute says that they have 30 days to release the tax lien. See Internal Income Code 6325. That is how it is supposed to work, but in reality they often overlook it and it doesn't get done. If this happens then a taxpayer can contact the Lien Desk by phone at (800) 913-6050 or by fax at (859) 669-3805. In the event you look at a copy of an actual Form 668(Y)(c) Notice of Federal Tax Lien you will notice a bold black box about halfway down the page around the left hand side. It says that when the lien is not refiled by the refile date in column (e) then the lien is releasable on its face. That sounds complicated, but what it means is the fact that if another lien wasn't filed before the dates in column (e) then the lien is no longer enforceable. This sometimes complicates matters because the IRS is often reluctant to issue a release for an expired lien. Debt Consolidation Loans Tips >>> http://www.debt-consolidation-calculator.us/3-debt-consol...

2. Does the IRS automatically notify the credit agencies that the lien has been released? If not, what do customers need to do to create sure their credit files are updated?
When the Certificate of Release gets filed in the courthouse exactly where the lien was initially filed, theoretically the credit reporting agencies should pick up the release. A much better practice could be to order three official copies of the release and proactively send them in to the three credit bureaus. It could take months or years for them to become automatically picked up by the bureaus.

3. What if you discover a tax lien on your credit reports and don't recognize it as yours? How do you study it to find out if it is valid?
This can be a much trickier query. What you would need to do is research the public records offices of each county that you simply have lived in since the issuance of the Federal Tax Lien. The official name for this records office varies by state. In Florida it's called the Official Records of the Clerk of Circuit Court. In California it's called the Workplace of the Recorder. Some states have most, if not all, of those records online while others have none of them online.

4. What in the event you find an old tax lien on your credit report and are not certain you paid it? What is the procedure for investigating it with the IRS?
You can call the IRS to inquire, but this can sometimes exacerbate an issue which has long been dormant. The best way by far to investigate such a situation is to contact a tax expert who's nicely versed in handling tax controversy instances and have him or her file a Freedom of Info Act request. This is very discreet way to inquire with out setting the IRS Collection machine loose on a taxpayer. Non Profit Credit Card Consolidation >>> http://www.debt-consolidation-calculator.us/non-profit-cr...

5. What if you find an old tax lien on your credit file, believe you paid it, but do not have records anymore? What is the process for investigating it using the IRS?
Similar answer to Question 4. You will in the end have to check using the IRS to see if the liability has been paid. It is essential to note that there's a 10-year statute of limitations for the collection of the tax. The ten-year clock starts to run in the assessment of the tax and there are many exceptions to this rule and circumstances that can cause the statute time to be extended (sometimes very considerably). This really is another situation that is best left to a professional to decipher.

6. How long should you anticipate the above to take?
Such an analysis should take 60 -90 days. A lien release subsequent to a request: 30-90 days.

7. What can you do to expedite the procedure if you're in the process of getting a mortgage, for instance?
You can contact the Workplace of the Taxpayer Advocate for your local region. See the IRS website at www.irs.gov for the phone number for your local area. The Taxpayer Advocate is definitely an independent branch of the IRS whose job it is to repair bureaucratic snarls and delays. There's no charge for their services. Using the Taxpayer Advocate can be very advantageous, particularly in the point of view that you simply get one individual to help you instead of speaking to anybody who answers the phone.

8. Are there any tips you'd offer for customers who discover tax liens on their credit files?
Be very cautious about contacting the IRS about tax liens that might pop up. You can wake the sleeping giant and really turn your financial life into a living hell. It's best to get professional help unless you are certain that you have paid off the lien and it is just a matter of getting a release to clear up that issue.

You will find a couple more issues I want to point out. The consumer who called me assumed that if he paid the liens they would come right off his credit reports. But that is not the case. According to the Fair Credit Reporting Act, they are able to stay on your credit report for seven years in the date they are satisfied or paid.

And the IRS can file a lien rapidly, in as little as ten days after you're notified that you owe taxes. So in the event you get a notice that you owe Uncle Sam money, resolve it quickly before you end up with serious damage to your credit report! If tax liens have already been filed, resolve them as rapidly as you are able to. Debt Consolidation Loans Tips >>> http://debt-consolidation-calculator.us/3-debt-consolidat...