What is a Tax Lien?
A tax lien can show up on your credit report if you happen to pay the incorrect amount of taxes or fail to pay income or property taxes to Uncle Sam. Or in other words, if you don’t pay your taxes or pay a deficient amount that you owed you can have a tax lien imposed upon you that will be displayed like a red flag on your credit report.
If you own lots of real estate, or other valuable properties make sure to keep a close eye on the amount of taxes you have to pay each year, that way there are no discrepancies or issues in the future.
How a Tax Lien can affect your credit situation
To put it gently, tax liens are severely ravaging to your credit reports. Even if you pay amount owed on the lien, it can stay on your credit reports up to 7 years from the date that you paid off the lien, not the date that the tax lien was filed. So if you are considering paying off the tax lien at a later date that is something very important to consider.
The entry get’s re – activated or re – flagged from the date of which it was last altered. Talk about getting punished for doing the right thing!
Removing a Tax Lien on your own
You can attempt to challenge a tax lien; however, to successfully remove a tax lien you have to dispute the accuracy of the tax lien itself. If the lien was clearly a mistake and meets the criteria of being misleading, innaccurate or unverifable then you will have a decent shot at getting the entry successfully erased.
If you can determine that the tax lien is not accurate, the next step to take it to send a letter to the IRS asking to verify the debt. If the IRS finds the debt verifiable then you are obligated to pay it. However, if the tax lien is not verifiable, then the lien will be erased.
If the tax lien is verified then disputing it for removal will become more difficult. The reasoning as to why it was not sufficiently paid when it was meant to be can be used as ingredients for a dispute letter. If you are the person responsible was not in a proper state to be able to make the payment, such as getting injured and living in a hospital for a month, then there may be a chance that the bureaus will release the accounts from your reports.
More often though, to successfully remove a verified debt you will have to have a background knowledge in the credit industry so you can leverage the consumer protection laws in your favor. Self education is the next step, but it is time consuming despite its benefits.
A smoother and perhaps smarter, choice
The good news is that there are other options to remove tax liens. Countless individuals in this situation have employed a credit repair service like Lexington Law.
Lexington Law has deleted millions of negative credit items like tax liens and has improved many credit scores astronomically. To speak with a credit expert, simply fill out the form below and you a paralegal from Lexington will followup with you for a free no obligation credit consultation.