Can I Remove An Unpaid Tax Lien From My Credit Report?

The short answer is yes. Anything that is inaccurate or unverifiable can be removed from your credit profile. With tax liens, however, if it remains unpaid you cannot avoid them. 'Them' meaning the IRS.  Just because it is not on your credit report does not mean you no longer have to pay them. It also does not keep lenders from finding out you have a tax lien and not granting you credit; most underwriters conduct a lien search prior to approving you for a loan.

The best method of permanent removal is to pay them either in full (if you have the money); negotiate an Offer in Compromise (pretty simple to do and the form with instructions are available on the IRS website; you can hire an attorney or accountant to do it for you as well) or to do a payment arrangement.

Since 2011, federal tax lien codes changed disallowing tax liens under $10,000 from being placed on credit reports. Any tax lien over $10,000 can be reported on a consumer's credit report, but can be removed by entering into a payment agreement and making 3 successful, consecutive auto-debited payments (Fresh Start Initiative). The lien will be released and removed from credit reports. I've only seen this happen for debts less than $25,000 but I've been told that persons with debts under $50,000 are eligible. You will not be approved for this if you have any other outstanding IRS debts. Once you've made your 3rd payment (or final payment) you can go on the irs.gov website and complete form 12277; which is an application for withdrawal. You will be notified of the approval (it's not automatic) within 90 days. I have had some tax attorneys get it in 2 days if you have the money to spare. They will usually mail you the letter and you can send it with a dispute letter to the credit bureaus for immediate deletion. They do report it to the credit reporting agencies, but I've been told it can take forever. There are some other qualifying factors as well, which can be read using the irs.gov link provided above.

Now, some credit specialist demand validation from the IRS to prove that the debt belongs to the consumer. Yes, this can be done since the IRS is a collector and not a government agency (it's true! Look it up!). The thing to remember is this; they are a collector working for the government! If you demand validation it can often wake a sleeping giant, so to speak and turn your life in to a living h$ll. Sometimes it's best to seek professional help.

If you don't recognize a tax lien as being yours, review your credit report, look at what county clerk's office is furnishing the information and research the public record with that county's clerk office.

If you have a debt that you're not sure has been paid off or not; consult with an attorney and have them file a Freedom of Information Act Request form for you (I've had clients contact the IRS directly and it did not go well!).

If it's an old tax lien there is a 10 year statute of limitation on the collection of that debt; however there are quite a few exceptions to that rule.

I do have tax professionals who act as advisers for MNH Credit Solutions' clients and I'd be more than happy to pass their information along. If you want someone to assist you with repairing your credit that has a proven track record of success and over a decade of experience; contact me right away!  My contact information is provided at the top right hand side of this page.

I hope you found this information helpful!