Credit Agencies No Longer Report IRS Tax Liens

Last year the three credit reporting agencies (Experian, TransUnion and Equifax) announced that they will no longer report IRS tax liens on people’s credit reports. See https://www.experian.com/blogs/ask-experian/tax-liens-are-no-longer-a-part-of-credit-reports/.

Prior to this, you had to wait seven years after you paid the tax liabilities the IRS lien covered to remove it from your credit report.  The wait was ten years for the lien to be taken off your report if the lien was unpaid.  Or, if you had a direct debit installment agreement and paid the amount owed down to $25,000, you could ask the IRS to withdraw the lien and then ask that it be removed from your credit report.

The impetus for this change originated with litigation between the three credit bureaus and the New York Attorney General.  The litigation involved problems with the accuracy of the credit bureaus’ data about consumers, the difficulties of getting errors on credit reports fixed, and the treatment of medical debts.  In 2015, they reached a settlement agreement and launched the National Consumer Assistance Plan (NCAP).  The agreement provided steps for the credit bureaus to inform consumers that they can get their credit report for free at least once a year through the website www.annualcreditreport.com.  It also established a six-month waiting period before medical debts could be reported to allow time for an insurance company to pay the debt or time to resolve disputes with insurance companies.

The NCAP also took steps to improve the accuracy of the reporting.  Prior to this, judgments and liens could be linked to the wrong person who may have shared a similar name as the debtor.  To prevent this, the NCAP requires public record data to include your name, address, and either your Social Security number or date of birth.  When they reached this agreement, the bureaus estimated that over 95 percent of civil judgment records and over half of tax lien records did not meet the enhanced data requirements.  So, they quickly decided to eliminate all civil judgments from credit reports.  After removing many IRS liens, in March of 2018 the credit bureaus decided to remove all remaining IRS federal tax liens from credit reports.  By April 2018 all tax liens had been removed from the bureaus’ credit reports.

However, Notices of Federal Tax Liens are still filed with the county clerk for the county in which the debtor owns real property and/or with the Office of the Secretary of State and are public record.  So, it is possible for lenders to find out about IRS liens, and they can affect whether you are able to get a loan or purchase supplies on credit.  Therefore, it is still advantageous to avoid them or to have them released or withdrawn when you are able.

If a Notice of Federal Tax Lien has been filed against you and you would like more information about how it can be released or withdrawn, contact our office today.  We are here to help.

Written by Robert V. Boeshaar

Robert V. Boeshaar

Robert V. Boeshaar is a Seattle tax attorney committed to helping individuals and small businesses who are facing problems with the IRS. He believes in using his experience to serve others and to make a difference in their lives.