IRS Program Allows You to Remove Certain Tax Liens From Your Credit Report

According to the Fair Credit Reporting Act, unpaid tax liens can remain on your credit report indefinitely and paid tax liens can remain on your credit report for seven years from the date you paid it off in full.

According to the Fair Credit Reporting Act, unpaid tax liens can remain on your credit report indefinitely and paid tax liens can remain on your credit report for seven years from the date you paid it off in full. But if you get the IRS to “withdraw” the tax lien, you can have it removed right away.

To qualify for withdrawal of your tax lien, you must:

  • pay the tax lien in full, or
  • enter into a direct debit installment plan to pay the lien in full and make three consecutive payments under the plan (the debt must be $25,000 or less).

You then request that the IRS withdraw the lien. Once the IRS does so, you send the withdrawal notice to the credit reporting agencies. The three nationwide credit reporting agencies have confirmed that they will remove withdrawn tax liens from credit reports. (To learn more about the qualification rules and how this process works, see Removing a Federal Tax Lien From Your Credit Report.)