If you have a tax lien on your credit report, you should take immediate action to remove it. This is a very bad mark and will lower your score considerably.
The first step is to request validation from the bureaus. This is done through sending a dispute letter directly to each.
Unfortunately mistakes do happen on your report; there are estimates that 1 in 4 people have an error on their report.
Upon receipt of your letter the bureau will investigate the mark. They will contact the state or federal government and ask for verification that the debt does exist. If it is verified then you will have to make some form of payment.
Depending on the amount you owe it may be in your interest to contact a tax negotiator. This is because they can often negotiate a reduced payment for you. However you can also negotiate directly with the government.
A tax lien can be collected upon for 10 years, and will stay on your report for 7 years once it is paid. If not paid then you can be reporting a tax lien on your report for a considerable amount of time.
Once you pay your lien in full, we suggest you wait 3 months and then dispute the mark with the bureaus again. It has been learned that once payment is made the tax departments will frequently ignore validation requests from the bureaus.
Thus your lien will not be verified and the bureaus will remove it from your report. Additionally if this mark was make in error then send any documentation along with your dispute letter to prove that.
Repayment
The IRS and state governments are willing to accept partial payment. It is called OIC (offer in compromise), this means you are settling your tax debt for less than the balance.
When the government decides to accept your OIC or not they will look at your; ability to repay, your assets, and your income. It can help your cause if you send a letter pleading financial hardship.
It may be in your interest to hire a tax attorney or negotiator to help negotiate a repayment amount. It is not absolutely necessary but nonetheless a good idea.
In sum, you can remove a tax lien and should. You don't just have to wait seven years for this mark to fall off naturally.
