Mortgage Loans : Erase Your IRS Tax Lien

7/21/2014

Erase Your IRS Tax Lien

Many Americans are struggling with getting back on their feet after the downturn, you know the Third Great Depression. Here is a tip that doesn't cost anything, but can greatly improve your credit and FICO score

The IRS will withdraw a federal tax lien after it has been released.

What?

You can clean up your credit and raise your FICO score by filing Form 12277

You do not need an attorney. You can file this yourself! You will have to follow up.

Form here: http://www.irs.gov/pub/irs-pdf/f12277.pdf/

This greatly benefits taxpayers who pay the tax they owe after the IRS has filed a Notice of Federal Tax Lien (NFTL) against them. Taxpayers who could not pay taxes due after notice and demand during this past economic downturn end up with a lien arising in favor of the United States upon all the property and rights to property of the taxpayer.

Unless the IRS “perfects” this lien by recording a NFTL in the public records, other creditors of the taxpayer, such as purchasers and holders of security interests, may obtain priority over the IRS. A NFTL adversely affects a taxpayer’s credit rating. Depending on the size of the paid lien and date paid it can reduce FICO scores by eighty to two hundred points. This more often harms taxpayers who own small businesses. Small business owners struggle the most with
the IRS, the State and regulatory agencies.

The program is called Fresh Start. There are terms and conditions to qualify. It takes 45 days minimum to complete and see your FICO score pop up.

You must have paid and they released the lien, and you filed

subsequent.

The IRS must release a tax lien, by issuing a certificate of release of lien, not later than 30 days after the underlying liability is fully satisfied through full payment of the tax, or is legally unenforceable (e.g., the statute of limitations for collecting the tax has expired). The IRS also has the authority, under certain circumstances, to withdraw a NFTL. If a NFTL is withdrawn, the tax laws shall be applied as if the NFTL had not been filed.

The circumstances that permit withdrawal are any one of the following:

Filing of the NFTL was premature or otherwise not in accordance with the IRS's administrative procedures.

Taxpayer enters into an installment agreement to satisfy the liability for which the lien was imposed.

Withdrawal will facilitate the collection of the tax liability.
With the consent of the taxpayer or the National Taxpayer Advocate, the withdrawal of the NFTL would be in the best interests of the taxpayer and the United States. The difference between a released or withdrawn NFTL is vital because of the way credit reporting agencies show withdrawals verses releases. Releases remain and lower FICO score, withdrawals disappear…erased from your credit history!

When a credit reporting agency receives a notice of the withdrawal of a NFTL, they delete any reference to the tax lien in the taxpayer's credit history. In contrast, when the credit reporting agencies receive a release of a lien, while they note the filing of the release in the taxpayer's credit history, the filing of the release does not operate to remove the references to the tax lien from the taxpayer's credit history.

In fact, typically a released NFTL remains noted in the taxpayer's credit history for seven years from the date of the release. (Credit reporting agencies are required to remove references to released tax liens after seven years under the Fair Credit Reporting Act.) -

File the form - follow the directions - poof magic it is ERASED in about 45 days.