Thursday, March 10, 2011

HOW TO MAKE SURE THAT AN IRS LIEN HAS BEEN RELEASED

Q. The IRS has released a lien that they had because I was behind on paying some tax. Even though they said they released the lien I don't trust them. Is there any way I can make sure that the lien has been released?

A. You don't trust the IRS? They are "from the government and here to help."

Here is what you should do. If you have questions regarding basic lien inquiries such as routine lien releases and lien payoff amounts, contact the Centralized Lien Unit by calling the toll free telephone number (1-800-913-6050).

In addition you can request a Certificate of Discharge from the IRS to prove that you paid the tax debt, should any problems arise in the future.

There is a problem is that the lien may impact your credit score even if it is timely paid. If this is a concern, you should dispute the public record notation of the tax lien that appears in your credit report with the credit bureaus. You should do this after you have paid off the debt and the lien has been released. The credit bureaus will then investigate the tax debt. The IRS, however, has little to no incentive to validate the fact that you once owed a tax debt if the debt has already been paid. Paying the lien and having it subsequently removed from your credit report will erase the last traces of the lien for good.

Larry Kopsa CPA