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How Unpaid Taxes Affect your Credit

How Unpaid Taxes Affect your Credit

The IRS does not report unpaid tax debts to the major credit reporting bureaus,1 which are TransUnion, Experian, and Equifax. Therefore, simply having unpaid taxes should not have any effect on your credit score. However, that significantly changes if the IRS places a lien2 on your property to try to collect unpaid taxes.

A lien is an interest in your property that does not allow you to sell that property until the debt attached to the lien is sold. Liens are filed by the IRS as a public record, so the credit reporting bureaus will have access to that information. As such, liens often will show up on your credit report.

Liens are considered to be serious derogatory marks on your credit and, therefore, they will have a significantly adverse effect on your score. In addition, any creditors who are reviewing your report will see that you have not met serious payment obligations. Employers may also consider this information when hiring, especially for jobs involving financial responsibility. Even after you pay or settle your lien, it will not automatically fall off and potential creditors will see that you had a tax default in the past.

Because even settled or paid liens can continue to affect your credit profile for an extended period of time, it is always best to avoid a lien in the first place. If you receive any type of notice that the IRS plans to place a lien on your property, you should take immediate action and contact a skilled IRS debt relief attorney who can advise you of your options to avoid a lien and damage to your credit.

Call an Experienced Tax Relief Attorney Today to Discuss Your Situation

You do not have to simply allow unpaid taxes to continue hurting your credit score and haunting your thoughts. You have numerous options to take control of your back taxes and fight against levies and other collection efforts of the IRS. At ,Attorneys Tax Relief we have helped many people nationwide handle their unpaid taxes in the best way that works for them. Please call today at (800) 261-6671 for more information.

1https://en.wikipedia.org/wiki/Credit_bureau

2https://www.irs.gov/businesses/small-businesses-self-employed/understanding-a-federal-tax-lien

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