The tax attorneys at Nardone Law Group in Columbus, Ohio, routinely advise taxpayers who have unpaid federal tax liabilities and who may have been contacted by a revenue officer with the Internal Revenue Service. If a taxpayer neglects to make payment of a federal tax liability, the IRS has broad authority and tools available to collect delinquent taxes, which includes the filing of a Notice of Federal Tax Lien. A Notice of Federal Tax Lien can cause the taxpayer significant financial harm, so it is important for taxpayers to be aware of the various options and alternatives available to minimize the impact of a Notice of Federal Tax Lien. In our prior article on Notices of Federal Tax Lien, we discussed the various available options, as well as collection alternatives, that can provide taxpayers relief from a Notice of Federal Tax Lien. Particularly, the withdrawal of a Notice of Federal Tax Lien is very important because it can protect and restore a taxpayer’s credit history and credit score with the appropriate credit reporting agencies.
Withdrawal of Notice of Federal Tax Lien
Withdrawal of a Notice of Federal Tax Lien is primarily available where the IRS has made either a substantive or procedural mistake in filing the Notice of Federal Tax Lien against the taxpayer. Withdrawal of a Notice of Federal Tax Lien is an excellent option for taxpayers, as it clears the tax lien from the public record, as well as from the taxpayer’s individual credit report. This effectively makes it as if the Notice of Federal Tax Lien never existed, giving the taxpayer a “fresh start.” (Click here for discussion of Withdrawal and the Fresh Start Program). As a result, credit reporting agencies will update the taxpayer’s credit report to remove any reference to a Notice of Federal Tax Lien.
Notifying Credit Bureaus to Update Credit Report
It is important to note, that taxpayers must take certain steps to have their individual credit reports updated with the applicable credit bureaus. Once the IRS has withdrawn the Notice of Federal Tax Lien, including filing the appropriate documentation with the County Recorder’s Office, the taxpayer will need to dispute the Notice of Federal Tax Lien with each of the three credit bureaus to have it completely removed from the taxpayer’s credit report. As discussed below, each credit bureau has a different dispute process.
1. The taxpayer will need to file a dispute directly with Equifax (along with documentation showing the lien has been withdrawn) either electronically through its online dispute process at the Credit Investigation Page, or by submitting a detailed letter (which Nardone Law Group can prepare) with copies of the supporting documentation to the following address:
Equifax Information Services
P.O. Box 740256
Atlanta, GA 30374
2. Equifax will then investigate the dispute with the source of the information, typically the IRS.
3. Within a month of the request to dispute an inaccurate item on the taxpayer’s credit report, Equifax will notify the taxpayer of the results of is dispute investigation.
4. Based on the results of the investigation, Equifax will either update the current status of the disputed information or delete the item from the taxpayer’s file.
NLG Comment: After the Notice of Federal Tax Lien has been removed from the file, the other credit bureaus should eventually receive the corrected information. The best practice, however, is to contact each of the remaining two agencies and follow their dispute process. This will ensure that the taxpayer’s credit history is completely updated and will help to avoid any miscommunication throughout the dispute process.
1. The taxpayer will need to file a dispute with Experian, either electronically through its online dispute process here, or by mailing a detailed letter (which NLG can prepare) with copies of the supporting documentation to the following address:
P.O. Box 4500
Allen, TX 75013
2. The dispute request should include the following information: (i) full name, including middle initial; (ii) date of birth; (iii) social security number; (iv) all addresses where the taxpayer has lived during the past two years; (v) a copy of a government issued identification card (i.e., driver’s license); (vi) one copy of a utility bill, bank or insurance statement, etc.; and (vii) a list of the item(s) that are disputed.
3. Once Experian receives the taxpayer’s dispute request, it will contact the furnisher of the information or the entity that collected the information from a public record source (IRS or the court) to investigate.
4. The investigation may take up to 30 days, at which point it will send the client the results. The status of the dispute can be checked at the Experian status page.
1. The taxpayer will need to file a dispute with TransUnion, either electronically through its online dispute process at the TransUnion Credit Dispute Page, or by mailing a detailed letter (which NLG can prepare) with copies of the supporting documentation to the following address:
TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19022-2000
2. TransUnion will investigate by contacting the provider or furnisher of the information. The source of the information has either 30 or 45 days to investigate whether the information is accurate. If the source does not respond within the required time frame, TransUnion will remove the information from the report.
3. If the dispute is filed online, the client will be notified by e-mail with the results of the investigation.
As you can see, each credit bureau has its own specific procedure for disputing a Notice of Federal Tax Lien. It is important for taxpayers to be aware of these procedures, as the removal of a Notice of Federal Tax Lien from their credit history will greatly improve their credit score and help to eliminate future financial difficulties.
Contact Nardone Law Group
Nardone Law Group frequently assists individuals and businesses with federal tax matters, including the withdrawal of Notices of Federal Tax Lien. If you have been contacted by an IRS revenue officer and are subject to a Notice of Federal Tax Lien, or have questions on how to dispute the lien with credit bureaus, contact one of our experienced tax attorneys today. Nardone Law Group’s tax lawyers and professional staff have vast experience representing clients before the IRS. If you have been subjected to a Notice of Federal Tax Lien, we will thoroughly review your case to determine what options and alternatives are available.