This is your very first post. Click the Edit link to modify or delete it, or start a new post. If you like, use this post to tell readers why you started this blog and what you plan to do with it.
CREDIT REPAIR AND YOUR TAXES
Tax Season has passed….For those of you facing a tax lien or who already have one there is some good news. The statute of limitations for reporting tax liens as laid out in the Fair Credit Reporting Act applies to “Paid” tax liens only. Meaning if you paid the taxes and now have a release of lien from the IRS or court and seven years has gone by the credit bureau must remove the tax lien from your credit report. So obviously one of the best strategies is to obtain a release of lien and put the credit bureau in a position where they have no choice but to remove it right?
But wait! What if you didn’t pay the lien yet?
Can you still obtain a release or “withdrawal” of the lien from the IRS? You can! There are many reasons why a tax lien can be legally released or withdrawn and only one has to do with money. For instance, what if it turned out you really didn’t owe the money as alleged? What if you didn’t owe as much as the original filing stated? What if the government can’t prove what you owe?
A “removal” or “withdrawal” of a tax lien is all you need to force the credit bureaus to remove it from your credit report. In the FCRA Section 605(a)(3) it states “Paid tax liens which, from the date of payment, antedate the report by more than seven years”. There is no mention of “removed” or “withdrawn tax liens.
There is also the “offer in compromise” strategy for those of you who owe and want to setup a payment plan. It is advisable to hire a tax attorney to negotiate this for you. Using a CPA (certified public accountant) or a tax service company may be cheaper but a lawyer provides two critical things those services can’t.
1) An attorney can offer expertise on taxes and the law.
2) Hiring an attorney provides a layer of legal protection as any documents or conversations you have with your attorney are protected under “attorney / client privilege”
On the IRS.gov web site they post the following regarding the removal or withdrawal of a tax lien.
“The IRS will withdraw a Notice of Federal Tax Lien if the Notice was filed while a bankruptcy automatic stay was in effect. The IRS may withdraw a Notice of Federal Tax Lien if the IRS determines that…
(1) The Notice was filed too soon or not according to IRS procedures.
(2) You enter into an installment agreement to satisfy the liability unless the installment agreement provides otherwise.
(3) Withdrawal will allow you to pay your taxes more quickly.
(4) Withdrawal is in your best interest, as determined by the National Taxpayer Advocate, and the best interest of the government” IRS.gov; www.irs.gov/taxtopics/tc201.html
You don’t necessarily need a release to effect the removal of a tax lien from your credit report. The credit bureaus use a two point match system to validate a debt no matter what type. If the lien isn’t in the right name, address, and social security number or if the case numbers do not match up you have a legitimate argument the lien is not valid.
Remember, the fact you owed money does not in and of itself mean the account or other adverse information was reported correctly. Please also keep in mind that removing a tax lien from your credit report will not by itself relieve you of the debt. Unless the lien is released, satisfied or withdrawn for legal reasons you will still eventually have to deal with it and should do so as soon as possible in order to avoid any further interruptions of your financial life.
Either way if you are facing tax issues and they are on your credit reports you need to formulate a strategy to get them removed. Don’t wait!
S. Louis Bisko
Author – Credit Warfare