Tax liens are
no joke. Aside from threatening your properties and assets, a tax lien can also
make your credit look even worse. Having debts is bad enough, but a lien that
appears on your credit file could really set you back. Once the IRS files a
lien against you, your credit score will take a considerable hit that it would
be difficult for you to ever obtain a loan.
Tax Liens on Your Record
Under the laws
set by the Fair Credit Reporting Act (FRCA), the credit reporting agencies (CRAs)
must include the tax lien in your credit report. Unpaid tax liens can
potentially remain on your file permanently unless the CRAs drop it or you have
paid the full amount. CRAs do have the tendency to drop liens from an
individual’s report after about 10 to 15 years but that is a long wait. Even if
you do pay in full, it will not make the lien disappear immediately from your
records and may remain there for 7 years.
Avoiding Tax Liens
The best way to
avoid tax liens is to just pay the amount you owe the IRS before they file.
Usually, there are time constraints involved in this, so you should always turn
to a tax lawyer who can help you respond to a tax lien and provide you with several
options for debt relief. If it is too late, you can always try to get the IRS
to withdraw the lien, also with the help of a lawyer.
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