The IRS will now REMOVE a tax lien from your credit report.
The IRS will now REMOVE a tax lien from your credit report “if requested by the tax payer” when payment in full is made. As opposed to showing it as a paid tax lien for seven years and then aging off. Once paid, It will be removed off the report like it was never there. But it gets better, watch my video on how to get it removed before you pay it off. www.thecreditguy.tv
Interesting news broke from the IRS last week, they’re going to start removing tax liens at the request of the taxpayer once the tax liens paid. In the past when a tax lien is paid of it would show as a paid tax lien for seven years. At that time it will age off the credit report. What the IRS is going to do is “at the taxpayer request” the IRS will remove the tax lien from the repository file.
The IRS has made an additional option. They said that if you set up automatic payments for that tax lien it will be removed “after a three month trial period ” from your credit report.
That means that you can actually get the IRS tax lien removed right off the credit report before the a lien is fully paid. That is very substantial given the impact of the IRS tax lien has on a FICO score. I wanted to share that with you. You can check out the full notice from the IRS is the link that I’ll attach here for now that is it for now thanks for tuning in and I’ll see you soon.
I thought I’d add a few comments for removing a PAID tax lien from your credit report instead of waiting 7 yrs for it to age off. I just went through this process and the lien has been completey deleted from our credit reports so I know it works.
1) We finished paying off our taxes per our installment agreement with the IRS.
2) Received IRS form 668(Z), Release of Federal Tax Lien, automatically from IRS once they processed our final payment.
3) Located IRS form 668(Y), Notice of Federal Tax Lien, sent to us when the IRS initially filed the lien with our county. This is crucial as Dave mentions in this video because it has the serial number of your original case file with the courts. If you don’t have it, go to the IRS first, then the courts as Dave mentions.
4) Located IRS form 12277 online and filled it out. Made sure that I checked the box indicating that the request was in the best interest of the government and the taxpayer.
5) Located and printed a copy of the notice from the IRS Newsroom dated 2/24/2011 in relation to the IRS’s new policy to withdraw paid tax liens
6) I wrote a cover letter including who, what, when, and why in relation to our request for the tax lien to be withdrawn, including a list of the 3 credit reporting agencies we wanted to be notified. I made sure to note both my SSN # and my spouse’s SSN # because the tax lien shows up on both our credit reports.
7) I enclosed the IRS form 12277, copies of IRS forms 668(Y) and 668(Z), and a copy of the IRS newsroom document from 2/24/11.
8) In about 2-3 weeks, we received IRS form 10916(c), Withdrawal of Filed Notice of Federal Tax Lien. This was our golden ticket!!
9) Although I asked the credit bureaus to be contacted, my local IRS office (Denver) indicated that they normally don’t do that. The information is deleted from the county records and the credit reporting agencies normally just pull from there so I did one more step as follows to expedite the process and make sure it was done.
10) We each contacted the 3 credit bureaus, disputed the lien, and provided a copy of IRS form 10916(c) that we received from the IRS in step 8 above. The credit bureaus verified the information and voila… the lien was completely deleted from our credit reports as if they never existed in the first place.
Woo hoo!! Refinance here we come… hopefully with a better FICO score.