tax lien

What is a Tax Lien?

A tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt.

The lien protects the government’s interest in all your property, including real estate, personal property and financial assets.

The IRS/State/County files a public document, the Notice of Tax Lien, to alert creditors that the government has a legal right to your property.

How a Tax Lien Impacts You?

  • Assets — A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.
  • Business — The lien attaches to all business property and to all rights to business property, including accounts receivable.
  • Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.

Avoid Tax Liens

You can avoid tax liens by paying your tax obligations promptly and filing your taxes on time.

Whether it’s federal, state, or local taxes, it’s important to stay on top of your tax debts.

If you can’t pay on time, file your taxes and set up a repayment plan.

Don’t ignore your tax liability. Past due taxes accrue late fees, interest, and if you get a tax lien against you, the government can freeze your bank account, garnish your wages, and garnish your tax return.

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How a Tax Lien Impacts Your Credit?

As a result of a study by the Consumer Financial Protection Bureau and a lawsuit that found issues with reporting public record information incorrectly, as of 2017 tax liens no longer report on consumer credit reports.

But, starting January 1, 2020, at the earliest the credit reporting agencies (Experian, Equifax, and TransUnion) may resume reporting the liens on credit reports.

Although you may not see tax liens reporting right away on January 1st 2020, don’t be surprised if they start to appear a few months later.

Once the credit bureaus commence the reporting, tax liens will begin to do substantial damage to credit reports and lowering credit scores as before.

How Long Can a Tax Lien Report on My Credit?

Paid tax liens can report on consumer credit reports for up to 7 years, while unpaid liens can report for up to 10 years.

increase score

What to Do If You Get a Tax Lien?

A tax lien reporting on your credit reports is going to cause substantial negative issues to your credit scores.

Paying your tax debt in full is the best way to get rid of a federal lien. The IRS usually releases your lien 30 days after you have paid your tax debt.

Once the lien is released you can file IRS form 12277 and request that the lien be removed from your credit reports.


State and local tax liens are a different story. Although it’s always a good idea to pay the debt, removing a state or local lien isn’t as streamlined as the federal counterpart.

You can try disputing the lien with the credit reporting agencies or requesting for the verification and validation of the trade-line information with LexisNexis and LCI.


Just like any other account, you should try to be proactive and work on the derogatory information but, it’s important to understand that the only information that can be removed from a consumer credit report is information that is inaccurate, unverifiable, incomplete, or not in compliance with the law. has helped thousands of clients improve their credit scores and remove tax liens from their credit reports.

If you have a lien on your credit reports contact to find out how we can help fix your credit and improve your credit scores.

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