Taxes and Credit Report

If one notices that a tax lien has been imposed on the credit report generated by the bureaus, then it is imperative that one takes action on the same. This is not a very good sign and it would have a bearing on your credit score. If your credit score is not up to the mark, then it would pose future problems for you with respect to sanction of loan, mortgage etc.

So the 1st thing you need to set right is for any errors or ambiguity in your credit score. You need to get in touch with the credit bureau that has generated your credit report. One needs to begin the process by issuing a dispute letter to the bureau.

Even credit bureaus do commit mistakes with respect to the reports. So you do not have to get worried. Mistakes do happen, but it is your duty to notify the bureau so that the mistakes do not go unseen. Once the bureau is in receipt of your dispute letter, it would look into the matter to confirm if there are any mistakes from their side. The credit bureaus would contact the offices of the Federal Government or State Government to clarify matters relating to your debt. Once they are totally clear about the verification they would intimate you and you would have to shell out some money.

Once could always get in touch with your tax consultant who would help in negotiating the taxes for you. Either you could approach the government directly or through any of these consultants. The choice is yours. A tax negotiator would help in getting you the best possible rates.

The amounts overdue by you are normally collected by the Federal Government or State Government once every 10 years. One needs to ensure that there is no negative report in your credit report, since the account would be in the records of the State for the next 7 years. If your default payments, it would remain in the records, which is obviously not something which anyone would want. Once you have cleared your payment, you need to wait for 3 months, till you hear something from them and remind them again with another dispute letter requesting the bureau for validation. It has been observed that once the government has received your payment, they would not consider the bureaus validation request.

So just to be on the safer side, you need to send reports stating that you have cleared all the amounts pending, so that you are clear from your side.

Post payment: Individuals interested in settling payments partly can opt for an OIC. State Governments normally agree to such OICs. Before agreeing to the OIC, the Government would make its enquiries relating to your asset value, your previous credibility, creditworthiness, whether you would default any further payments. One could always forward a letter of hardship stating that you are going through a financial crisis. This letter might be considered by the Government.

Obviously, you would not want a negative mark on your report. So what are you waiting for? Try and pay all your outstanding and start afresh. A seven year period is too long. Do not wait. Go ahead and try and clear your amounts.

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