Home > Taxes > How Long Does a Tax Lien Stay on Your Credit Report?

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It’s a trick question, because as of April 2018, tax liens were all removed from credit reports. The bureaus took this step to protect the integrity of those reports. According to the Consumer Financial Protection Bureau, many judgments and liens were being reported incorrectly. That caused errors to credit reports not affiliated with the various debts in question.

But that doesn’t mean you shouldn’t worry about a tax lien. First, the policy could change at any time and tax liens could show up on the report again. Second, tax liens can give the federal government the right to legally seize your assets in payment for your tax debt. Getting rid of the lien before that happens can save you a lot of stress and hassle.

What Is a Tax Lien?

A Notice of Federal Tax Lien is a tool the IRS uses to let creditors and others know that it has an interest in your property because of tax debt you still owe. Specifically, it puts the IRS in line to receive any payment associated with your assets if they are sold or liquidated. If you sell a home, for example, the IRS can take any profit if it has filed a Notice of Federal Tax Lien.

If you can’t pay your taxes, the IRS may file a lien. The IRS automatically files when the amount owed is $10,000 or more.

What Is the Fresh Start Initiative?

What many people don’t know is that in 2011 and 2012, the IRS implemented something called the Fresh Start initiative. This is a series of procedures and policy changes directed toward taxpayers facing collection from the IRS.

One of the changes includes a policy that allows certain taxpayers to request that their tax liens be withdrawn. They can do so even before the tax debt has been paid. Under this policy, a taxpayer can request the tax lien be withdrawn in certain circumstances.

Here’s how to take advantage of the Fresh Start initiative.

1. Determine If You Qualify

You can qualify to request your lien be withdrawn if:

  • Your tax liability has been satisfied because you’ve paid what you owe
  • You’ve been filing your individual and business returns for the past three years
  • You are current on your estimated tax payments and federal tax deposits

Even if you haven’t paid the IRS what you owe, you may be able to qualify for this program. You must owe$25,000 or less. You must also have entered into a direct debit installment agreement where your payments to the IRS are taken from your bank account automatically.

There are other requirements you’ll need to meet. You must have made at least three direct debit installment payments successfully. You must also not have defaulted on a previous installment agreement. The IRS has the full list of qualifications.

2. Apply to Have the Lien Withdrawn

If you believe you qualify, fill out IRS Form 12277, Application for Withdrawal. It’s a one-page form that comes with one page of instructions. Complete it and send it to the IRS per the instructions.

If the IRS approves your request, it says it “will file Form 10916(c), Withdrawal of Filed Notice of Federal Tax Lien, in the recording office where the original NFTL was filed.” It will also provide you a copy of the document for your records. This means you will have a written record that the lien has been withdrawn.

Will It Help My Credit Score?

Because tax liens are no longer reported on your credit history, getting one withdrawn won’t help your credit score directly. However, the fact that you resolved such a major debt and can move on with your financial life may impact your credit score. After all, you’re now free to worry less about those back taxes, so you might be able to make more timely payments on other debts.

In some cases, however, resolving a tax lien could bring your score down a bit. This could occur if you take out a new debt to pay off the taxes. Your credit score could temporarily drop because you’ve increased your debt utilization ratio. It might also have dropped because of the hard pulls on your credit history that occurred when you applied for the loans.

It’s a good idea to understand what’s going on with your credit score no matter what your tax situation is. You can check your credit score free using Credit.com’s Credit Report Card.

Some consumers have complained that getting negative items off their credit score didn’t really help. When that happens, it’s often because the information that was removed was very old or they haven’t been able to establish positive credit references to rebuild your credit score. Still, the fact that there are no liens reported can be helpful when applying for another loan such as a mortgage.

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  • Missy N

    Is it worth it to file the paper with the IRS to have tax lien that’s been released removed now if it’s going to be automatically removed in may 2017. I don’t want to mess anything up from it falling off since it’s been released already

  • chilipepper78

    I followed this procedure to the letter and got my withdrawl letter from the IRS but it is still being reported on public records by my county clerk even though they have a copy. They said they won’t ever remove the lien from public records. WHat now?

    • Jeanine Skowronski

      You may want to consult a consumer or tax attorney about your best legal recourse.

      Thank you,


      • chilipepper78

        I also found out that it has been reported long past the 7 year deadline and still won’t be removed. Something fishy going on in Michigan other then bad water in Flint

  • bob w

    why can a tax lien, IRS or State be on a credit report if its been paid, i thought the lien was removed when the lien was satisfied. why would they allow an item that was paid to be left on a credit report when it was satisfied?

  • Harper Davis

    once an irs tax lien has been satisfied, is the effect on a individual’s credit still ongoing?

    • http://www.Credit.com/ Gerri Detweiler

      It can be. Paid tax liens may be reported for up to seven years after they are paid, so if you think you may qualify for the relief in this story it’s worth applying. If the lien is removed it can’t affect your credit scores.

      This article may also be of interest to you: How Long Does It Really Take to Improve Your Credit?

  • Todd

    When discussing tax liens on your credit file are we talking STATE or FEDERAL? Also what does the law actual say? After the tax lien is satisfied, do they stay on your credit file for 7 years from date filed or date you satisfied them? I have seen this stated both ways on the internet. I have a state tax lien from ’09 taxes (dept of revenue filed 6/21/2011) I never knew about this until I sold my house in late 2014. Upon discovery I paid immediately ($600 on 11/05/2014) and it has been released (with letter from Indiana Revenue Dept). I wrote the credit burea sending them a copy of the letter requesting this removed and they sent me a letter stating “Estimated month and year item will be removed” 5/2021. Are you freaking kidding me! This will stay on my report for 10 years! I’m trying to be professional but this is a crock………

    • http://www.Credit.com/ Gerri Detweiler

      This article refers only to federal tax liens.. The Fair Credit Reporting Act says “Paid tax liens which, from date of payment, antedate the report by more than seven years.” And you’re right– Congress allowed tax debt be reported longer than any other type of negative information. You may want to contact your state legislators. Some states have enacted provisions that emulate the federal policies, but most have lagged behind.

  • KIM

    I have a South Carolina state tax ien on ym credit report. It’s been paid since 2013 and released. How do I get it removed from my credit report?

    • http://www.Credit.com/ Gerri Detweiler

      Paid tax liens can generally be reported for ten years. The program described in this article is for federal tax debt. You’ll need to check to see if your state offers something similar.

  • Adam Clark

    What if my lien was filed by a local government department and not the IRS?

    • http://www.Credit.com/ Gerri Detweiler

      Then this particular program doesn’t apply unfortunately. You’ll have to contact the taxing authority to see if they offer something similar.

  • Puneet


    I had lived in California till 2010 and then moved to India. I just came back in July 2010 and have found out that California Tax Board has applied a Tax Lien of $3700 (approx) for some securities income that had not gotten reported. I have paid the amount and Tax Board has issues a Notice of Release of Lien. However, as I had moved out to India and they did not have my India address, I never received any notice. So, technically, I should not be penalized for something I was not aware of. Secondly, Tax Lien has been put because of certain securities that I earned had not been reported and IRS applied taxes on the entire amount rather than capital gains – so I am expecting California to return some of that amount.

    So, I have two questions. Will getting this lien being removed recorded with credit bureaus help in improving my credit score that was hit by the application of this lien? Second, what do I need to do to get this lien expunged from my records.

    Any help would be appreciated.


    • http://www.Credit.com/ Gerri Detweiler

      Paying the lien does not remove it from your credit reports. It can still be reported for seven years from the date it was paid and released. (The Fresh Start program referenced in this article can get liens removed, but it applies to federal tax liens, not state ones.)

      To challenge the validity of the tax lien will require the assistance of a tax professional. Unfortunately,t that’s beyond our area of expertise.

  • mike

    I have an ohio state tax lien that was entered on june of 2006. If I pay it off now, will it be removed from my credit report or will the clock restart and be on the credit report for another seven years as paid/satisfied?

    • http://www.Credit.com/ Gerri Detweiler

      Tax liens may be reported for seven years from the date they are paid. (As a practical matter some credit reporting agencies remove them sooner if the tax lien is quite old.) However, you can check if your state has a program similar to the federal Fresh Start program where you can get a tax lien withdrawn when it is paid. If not that may be something to suggest to your state legislators.

  • BPM

    I have a Federal Tax Lien that was released(I have the Form 668 stating such) and the IRS actually paid me back for years of interest and penalties, etc.. How can I get this tax lien and public record removed from my credit reports?

  • Ben

    Dear Gerri, I lived in the US (i am Australian) between 1996 and 2001. I have just relocated back to the US with my family. I went to lease a car and provided my old SSN. The leasing company just informed me i have a $100,000 tax lien recorded on my credit profile. I haven’t spoken to the IRS yet. I am not sure why / how i owe tax but its possible. However i have read that there is a statute of 10 years, after which time you are no longer liable for the debt. Given it is 14 years since leaving the US and the period which there could have been a tax liability caused, how/is there a way to remove it from my credit file? Also can i get confirmation from the IRS it is past the statute and not due?

    • http://www.Credit.com/ Gerri Detweiler

      Given the amount of money involved, I would suggest you consult a tax professional who handles tax problems before you do anything else. Unpaid tax liens may be reported indefinitely, so you need to talk with the tax professional both about the debt and your options for getting it off your credit reports.

  • E.T.

    I have an unpaid unsecured property tax lien with Los Angeles County for a boat i owned about 9 years ago. The filing date on my credit report shows 2006. Will this fall off my credit in 2016?

    • http://www.Credit.com/ Gerri Detweiler

      Unpaid tax liens may be reported indefinitely.

  • Mary

    My husband and I have property tax liens on our credit reports. I have heard that the IRS offers a program where the lien can be pulled. We have paid the liens and they were placed prematurely by our local government tax commissioner. What can we do?

    • http://www.Credit.com/ Gerri Detweiler

      Generally tax liens can be reported for ten years from the date they are paid. The federal Fresh Start program applies to liens filed by the IRS. For ones filed by a state or local taxing authority you need to check with them to see if they offer something similar. As for your statement “placed prematurely” I am not sure what you mean but if the lien should have never been filed at all then you’ll need to talk with the agency that placed the lien and/or the court. Disputing public record information is particularly thorny because if the data is still in the public record it will be confirmed when you dispute it.

  • jc

    Hi, although I received notice of WITHDRAWAL TAX LIEN Form 10916 (c) from IRS April 2011, the Liens continue to show on my credit report. This is killing my credit. I have contacted IRS and requested help, as well as Manhattan, Office of Register. I was advised the Liens should have dropped off anyway (date back to 2000-2001). And yet, there they are, staring me and potential creditors in the face. It does no good to show the WITHDRAWAL FORMS to “potential creditors”, I have tried. I desperately NEED a car. Please, can someone help?

    • http://www.Credit.com/ Gerri Detweiler

      jc – Did you dispute these liens on your credit reports directly with the credit reporting agencies and supply the copies of these letters? If you did and they were not removed then I’d suggest you either file a complaint with the CFPB or talk with a consumer law attorney as you may have a case for credit damage.

  • Renard Pongrac

    I have a question and am hoping someone can help and assist me and it would be much appreciated. First of all I was an actual victim of identity theft and I was taken to the cleaners for almost everything. I had learned that there are 3 federal tax liens on my credit reports and I have disputed these multiple times with all the credit bureaus however they refuse to remove them from my credit files. I sent them all the official documentation regarding the police reports and all the other legal stuff as well, but again will not take them off. The thing here is these 3 federal tax liens are equally to over one million dollars and I never have earned that amount of salary or money in my entire life. The rest of my credit is good and my bills, credit cards, auto loans are all paid on time each and every time every month, but with these 3 federal tax liens on my credit reports I can not get my credit score above 600 and any time I need or want any financing the bank wants 40-50% down before they will approve it. Again, if anyone here can assist or help me out here with this it would be deeply appreciated and thank you for taking the time to read my current issues and problems I am having with my credit. Regards and thank you.

    • http://www.Credit.com/ Gerri Detweiler

      Have you talked with a consumer law attorney? You may have a case for credit damage and may be entitled to damages as a result. You can look for a consumer law attorney with experience in FCRA issues at the website of the National Association of Consumer Advocates website.

  • http://www.Credit.com/ Gerri Detweiler

    Unpaid tax liens may be reported indefinitely. In terms of your comments about the qualifications, filing your taxes for the last three years is not the only requirement. You must be making payments or have resolved the debt. I’d suggest you read the instructions for Form 12277 and talk with a tax professional about your options for resolving this tax lien.

  • http://www.Credit.com/ Gerri Detweiler

    You’ll need to talk with a local real estate attorney to clear this up. Perhaps there is a mistake.

  • http://www.Credit.com/ Gerri Detweiler

    If you qualify, you can request the lien be removed immediately if you qualify. If you don’t, then it sounds like it will come off your reports on 12/17. Reaching an offer in compromise shouldn’t extend the reporting period.

  • http://www.Credit.com/ Gerri Detweiler

    That’s fabulous! Thank you for sharing this. Do monitor your credit scores – you will probably see improvement. Here’s how to get your free credit score.

  • http://www.Credit.com/ Gerri Detweiler

    You will need to check with your state taxing authority to see if there a similar program. Even if there is not you still should make sure that the release of lien (or whatever it is called in your state) has been filed so that it shows as paid on your credit reports. That way the state liens can’t be reported for more than 7 years from the date they were entered by the court.

  • Ann

    I went through the process and have a signed 10916 form (the lien was paid over 6 years ago). I have sent it to all 3 of the credit reporting agencies and Transunion responded as ‘release of tax lien verified, no change’. They don’t seem to be recognizing that this allows it to be withdrawn. Do you have any advice for me? Thanks

    • http://www.Credit.com/ Gerri Detweiler

      Hmmm…can you get a copy of your TransUnion report to see if it has been removed? Or you can try calling them if you already have a copy of your report. If they still haven’t removed it I would suggest you file a complaint with the Consumer Financial Protection Bureau.

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