With that being said, this leaves you with two options to make sure that the lien is either withdrawn or it is released.
A Federal Tax Lien RELEASED: Under 26 U.S. Code Section 6502 the statute of limitations is generally 10 years on a federal tax lien. What this means to you is that usually..your tax lien will be released automatically after 10 years.
However, IF…you need your credit report to look better BEFORE the ten years is up, then once again you have two options: 1) Satisfy the lien by either paying the amount in full OR..2) make an attempt to settle the amount due with IRS with an Offer In Compromise.
As you can guess there are no guarantees in dealing with IRS, therefore an OFFER In Compromise doesn’t mean you will reach a settlement. Because it is an ‘offer’, you may still be held responsible for the full amount, of course, depending upon your circumstances.
IF…your Offer In Compromise is accepted, this will not affect the amount you owe on the tax lien. It does mean you will have the opportunity to make what would be perceived as affordable payments until the amount agreed upon has been paid in full. When IRS is satisfied, meaning all fees related to the release have been paid, then the lien can be released.
A Federal Tax Lien WITHDRAW: This option offers a big foot in the door to you. At this time, IRS, the NOTICE of a tax lien can be withdrawn, meaning it will no longer be seen in your credit report, IF your tax lien is under the following circumstances:
- The notice was filed too soon or not according to procedure;
- You entered an installment agreement to pay the debt on the notice of lien;
- Withdrawal will speed the collection of the tax; or
- Withdrawal would be in the best interest of both you and the government. (Source: http://www.irs.gov)
What # 4 basically means is IF.. you are placed into a position or circumstance that your tax lien is preventing you from making a transaction that would enable you to pay the lien, it could be withdrawn to allow you to make the transaction and, in turn, pay the debt.
Of course, we all know IRS does not make any process easy, however, if funds become available to you making it possible to settle your tax lien, you may have a chance of getting the lien withdrawn or released. You can then proceed in attempting to remove it from your credit report with the normal dispute process.
Remember there always options, even when dealing with IRS. Now, there is a process to remove this public record that is extremely damaging to your credit file, and your lifestyle . The basic requirement is you have entered into an installment agreement to pay the debt on the notice of lien.
Normally a tax lien is seen in a credit report until it is satisfied or paid. You now may have an opportunity to remove this damaging data from your credit history by following the current and correct procedures that satisfy both IRS and the credit reporting agencies. By educating yourself of your options, you can proceed to build a credit report reflective of your current lifestyle.
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