Tax Lien Q & A
Q:
I have a tax lien on my credit report from 1998. This tax lien was due to taxes on a 1099 job I had for 2 years. I did not pay the amount owed for the year of 1997. The IRS filed a tax lien for $12,000. My attorney said it should drop off after seven years. Well 7 years was a while back. What am I missing here? I have been told this tax lien will affect my credit score as well. I want to resolve this matter as quick as possible. I am getting ready to sell my home and purchase another home.
Jim
A:
Determining when collections are going to come off your credit report might seem simple, but there are some types of credit report activity that does not apply to the 7 year rule. Tax liens are one of those debts owed that will not go away until you pay it. The Fair Credit Reporting ACT has different rules for this type of debt owed. Here are the facts.
• Unpaid Tax Liens- there is not a set expiration date for unpaid tax liens according to the FCRA. So tax liens will stay on your credit report until you pay it. Some credit bureaus cap how long they report records like tax liens for up to 15 years. So if a tax lien has been reporting for over 15 years, you might consider disputing to see if the bureaus will remove.
• Paid Tax Liens – Once a tax lien is paid off, the tax lien will report on your credit report for 7 years from paid date. Tax liens are the only record where the expiration date is tied to repayment.
Jim you do have a chance of getting this record off by disputing it. There is no guarantee it will com off though. You will more than likely have to pay the debt off. You can use our how to dispute process here.
Mike Clover
CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.
I have a tax lien on my credit report from 1998. This tax lien was due to taxes on a 1099 job I had for 2 years. I did not pay the amount owed for the year of 1997. The IRS filed a tax lien for $12,000. My attorney said it should drop off after seven years. Well 7 years was a while back. What am I missing here? I have been told this tax lien will affect my credit score as well. I want to resolve this matter as quick as possible. I am getting ready to sell my home and purchase another home.
Jim
A:
Determining when collections are going to come off your credit report might seem simple, but there are some types of credit report activity that does not apply to the 7 year rule. Tax liens are one of those debts owed that will not go away until you pay it. The Fair Credit Reporting ACT has different rules for this type of debt owed. Here are the facts.
• Unpaid Tax Liens- there is not a set expiration date for unpaid tax liens according to the FCRA. So tax liens will stay on your credit report until you pay it. Some credit bureaus cap how long they report records like tax liens for up to 15 years. So if a tax lien has been reporting for over 15 years, you might consider disputing to see if the bureaus will remove.
• Paid Tax Liens – Once a tax lien is paid off, the tax lien will report on your credit report for 7 years from paid date. Tax liens are the only record where the expiration date is tied to repayment.
Jim you do have a chance of getting this record off by disputing it. There is no guarantee it will com off though. You will more than likely have to pay the debt off. You can use our how to dispute process here.
Mike Clover
CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.
Labels: auto loans, credit report, credit score, identity theft, mortgage loans
posted by my720fico at
3:39 PM
7 Comments:
Taxes Suck
By
NetDebt, At
June 16, 2008 11:52 AM
Wrong. An IRS tax lien has a life-span of 10 years from the date the underlying tax was assessed. The 10-year period can be extended by certain things the taxpayer may do, such as file a bankruptcy or submit an offer-in-compromise. And, the IRS can sue to reduce the lien to a judgment in federal district court, which will extend the period, but the IRS rarely goes to that trouble.
By
Morgan King, At
June 20, 2008 9:14 PM
Actually I am correct, tax liens once paid are on your credit report for 7 years. Not sure if that is what you are talking about.If it is not paid, some bureaus will remove after 15 years, no guarantee. That does not mean you dont owe the debt.
By
my720fico, At
June 20, 2008 9:17 PM
I've just paid in full both a federal tax lien & a civil judgment, and my credit score dropped 40 points. I haven't done anything else that would impact my credit score. Why would my score drop so much? If this is not the appropriate forum to be asking this question, I apologize.
By
Susan, At
August 22, 2008 1:20 PM
Not sure why your credit score would have dropped other than it being a recent update from balance being owed to paid. I would not sweat it, because you have to pay those types of debts anyways, because you cannot get most loans with liens on your credit report.Give it a couple of months and your credit score will go back up. You might check your credit report to make sure another collection was not re-sold, this typically drop's your credit scores like that, not paying off a collectin or tax lien.
Mike Clover
By
my720fico, At
August 22, 2008 1:32 PM
I received a tax lein for a very small amount of money and paid it immediatley. My credit score has been lowered because of it. Do I need to send the lein release to the credit report? Will it help my credit score?
By
nancy, At
October 26, 2008 1:51 PM
Yes, you will need to send the release of lien to the credit bureaus to make sure the lien holder sent the release of lien to the credit bureaus. Once updated you might see a increase in your credit scores, no gurantees though with public records. But if you want to buy a home you typically cannot have a public record like that showing a balance still owed.
By
my720fico, At
October 26, 2008 2:17 PM
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