IRS Makes it Easier to Get Tax Liens off Credit Reports

IRS has changed its rules concerning the filing of tax liens against taxpayers, which IRS reports to the credit reporting agencies. Tax liens dramatically reduce credit scores. It has been difficult to get the tax liens off one’s credit reports even when the lien is paid.

IRS said it changes will help people with tax debts get a fresh start. One of the biggest changes is that people who pay their tax debt in full or enter into a direct debit installment agreement can ask to have the tax lien withdrawn. Once that is done, the taxpayer may ask the credit bureaus to remove the record of the lien from his or her credit report.

Naturally, IRS has a form, Form 12277 Application for Withdrawal of Filed Form 668(y) Notice of Tax Lien for this purpose. Once the taxpayer files this form and IRS approves, IRS will send the taxpayer a Form 10916(c), Withdrawal of Filed Notice of Federal Tax Lien.

Formerly, the tax lien would remain on the person’s credit reports even though it was paid in full. The credit bureaus would change the report to paid, but the record of the lien heavily impacted the person’s credit score.

The article quotes an Experian representative saying that if IRS withdraws the lien, “We will remove it from the credit report.”


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