IRS LIENS

E. Martin Davidoff

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Tax Lawyer

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Posted over 1 year ago. 0 helpful votes

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Do you know someone who has paid the IRS, yet their old IRS liens still impact their credit? If so, we can help! See our new website, www.lienbusters.com.

When a person files a tax return with a balance due and that balance is not paid, the IRS has a lien on that person. However, the lien is a secret lien, and has no real impact. If the person fails to adequately deal with (i.e. pay off) the "secret" lien, the IRS files a public tax lien through their Notice of Federal Tax Lien ("NFTL"). The filing of an NFTL wreaks havoc on a person's credit profile, making it difficult to obtain credit, rent an apartment or gain employment.

In February of 2011, the IRS agreed to withdraw liens or hold off on placing liens in certain circumstances as part of their "Fresh Start" program.

When a person pays off the IRS, any liens in place for the tax period that was paid will be "released." At this point the person's credit report reflects that the balance due to the IRS has been satisfied, but the credit profile still shows that a lien was filed. Thus, credit scores remains negatively impacted by a tax lien well after the balance has been paid off. However, if the lien is withdrawn, it becomes non-existent - it never happened. After a lien withdrawal, credit scores appear as if there was never an IRS lien. That is the goal of www.lienbusters.com , to help people have their liens withdrawn and put them on the path to remove the lien from their credit profile.

The following article by the Pennsylvania Institute of CPAs talks about the difference between a release and a withdrawal in the context of IRS tax liens.

http://www.picpa.org/Content/42582.aspx

Here is a link to a USA Target article on the new IRS lien policies:

http://usatoday30.usatoday.com/money/perfi/columnist/block/2011-03-01-yourmoney01_ST_N.htm

Here is an article on tax liens from a credit perspective:

http://blog.credit.com/2011/12/you-paid-off-your-tax-lien-so-how-does-that-affect-your-credit/

If you, any of your friends or family need assistance with federal tax liens, contact Rachel Baldwin of our office.

Additional Resources

www.lienbusters.com

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