Having a tax lien put against you that shows on your credit or against your property can in reality be one of the most demanding credit issues that you ever deal with. The Internal Revenue Service can be rather ruthless when it comes to being paid their money and there is a basis for the old saying about “death and taxes” because you are not liable to be able to get out of it finally without paying at least a portion of it.
If you are a property owner, the tax lien will be put against the property. You will not be able to sell the real estate without fulfilling the tax lien and it is even possible that in due course the property could be confiscated. If you do not own real estate the tax lien will still show on your credit report and you will not be able to get a home loan, a car loan, student loans and maybe even credit cards. A tax lien essentially destroys your credit.
It is extremely unlikely that you will be able to get out of a tax lien. The most you can hope for is that you can settle for a smaller amount to satisfy the tax lien. However, even after the tax lien is fulfilled it could still remain on your credit report for as long as 7 years. If you never pay it, it can stay as long as 15 years and the IRS can restart the lien, so you could conceivably have a tax lien on your credit forever if you never take steps to satisfy it.
In just about every case you are much better off to pay off the tax lien rather than fight it. You may be able to cooperate for a lower amount and you should try to do that. However, the IRS will locate you and you will most likely not be able to get away with not paying the taxes that you owe.
After you have paid off the tax lien, it is possible that it will still show on your credit report for as long as 7 years. Though, you can take some actions to try to avoid this. When you are negotiating for the smaller amount, put in a request that they remove it from your credit report also. If you are unproductive at that you can try to dispute the listing with a letter.
You will need to write a letter or dispute to all of the three chief credit-reporting bureaus. In the United States, they are Equifax, Experian and TransUnion. You have the right to dispute any bad listing on your credit report because of the Fair Credit Reporting Act. If the tax lien has been paid and is showing as satisfied you may be able to get it deleted.
As you are disputing the derogatory listings make sure that you keep a copy of all communications either from the credit bureaus or to the credit bureaus. After they take delivery of the letter, they have 30 to 45 days in which to either verify the accuracy of the listing or remove it from your report. If you do not get a deletion straight away you may have to try again as many times as it takes to get results.
Writing letters of dispute and doing other credit repair techniques can be very beneficial for you and your financial life in the long run. You can do it yourself or take on a professional but you are accountable for knowing and dealing with whatever shows on your credit report and if you need to do some credit repair, it is better to do it sooner rather than later when you need to have good credit.
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