How to remove a tax lien from your credit report?

taxes illustration

Your credit history shows creditors how you handle debt, but other negative information sneaks onto the report too. This includes information about Federal income tax liens.

An unpaid lien represents a derogatory mark that will anchor your credit score. Even a paid tax lien will affect your credit score for seven years. But you can remove a tax lien from your credit report. This is how.

Step One: Pay the tax lien

An unpaid tax lien for Federal Income taxes can stay on your credit report forever. It will persist through bankruptcy and other credit catastrophes. It is the only negative mark that could stick on your credit report indefinitely. Although, in practice, most credit bureaus remove information about unpaid tax liens after ten years.

Paying a tax lien means it will fall off your report seven years after you complete payment. However, that’s not the fastest way to remove a paid tax lien from your credit report. Paying the tax lien in full satisfies your obligation to the Federal government, and it opens up the possibility of enrolling in the IRS’s Fresh Start Initiative.

The Fresh Start Initiative is a program where the IRS will withdraw their tax lien if you meet certain conditions. As soon as the IRS completes the withdrawal, you will no longer see the tax lien on your credit history.

If you cannot pay the tax lien, set up a Direct Debit Installment plan to payoff the tax lien. The payment plan opens you up to the Fresh Start Program under certain conditions.

Step Two: Meet Fresh Start Eligibility Requirements

preparing for taxes

For the IRS to withdraw your tax lien, you must meet the Fresh Start eligibility requirements. You can meet the requirements one of two ways. The first way requires you to do the following:

  • Pay your tax lien
  • Show compliance for three years of tax filing
  • Stay current on estimated taxes

You can also meet the requirements by doing the following:

  • Owe less than $25,000.
  • Set up a Direct Debit Installment Agreement
  • Your direct debit must pay the amount owed within 60 months or before the collections statute expires
  • Show full compliance for filing requirements
  • Show full compliance for payment requirements
  • Make three consecutive direct debit payments.
  • No defaults on current Direct Debit Installment Agreement
  • No defaults on previous Direct Debit Installment Agreements

If you meet the requirements, you will qualify to remove the tax lien from your credit report, but your work isn’t done. The next three steps can be complicated.

If you prefer to have help from an expert, consider enlisting the experts at Lexington Law. Their team of legal experts can navigate the complicated intersection of credit and tax law for you. If you’re dauntless, we will show you what the experts will do.

Step Three: File Tax Lien Withdrawal Form

tax, writing machine

If you meet the qualifications for the Fresh Start Program, file a Tax Lien Withdrawal Form (form 12277) with the IRS. The IRS gives step by step instructions for filling out this form in this video.

After completing the form, you will need to mail IRS office assigned to your account. If you don’t know the address, use Publication 4235 to find the right office and its address.

Send the form via first class mail with the title: ATTN: Advisory Group Manager, followed by the address you found in Publication 4235.

Step Four: Request Removal from IRS Lien Operations

After the IRS approves your application, they will will contact you. At that point, you have the legal right to request that the IRS remove the tax lien from your credit report. The IRS will not do this without your prompting.

You need to send a written request asking the IRS to remove the tax lien from your credit report. Use the template below as a guide.

DateInternal Revenue Service
Centralized Lien Operation
P.O. Box 145595, Stop 8420G
Cincinnati, OH 45250-5595

Taxpayer Name:

Street Address
City, State, Zip Code

Tax Period:
Tax Form: 10916(c)

To Whom It May Concern:

I am writing to request that you send written confirmation of the Withdrawal of a Federal Tax Lien to the following parties:

Experian National Consumer Assistance Center
P.O. Box 4500
Allen, TX 75013

TransUnion Consumer Relations
P.O. Box 2000
Chester, PA 19016-2000

Equifax Credit Information Services, LLC
P.O. Box 740241
Atlanta, GA 30374

I have attached a copy of Form 10916(c) Withdrawal of Filed Notice of Federal Tax Lien.

This form indicates that the IRS withdrew the Federal Tax Lien. My records show that the tax lien is still on my credit report. Please send a copy of form 10916(C) and a request to remove the Federal Tax Lien to the credit bureaus above.

You can reach me by phone at (###) ###-####.

Many thanks for your attention to this matter.


Your Name

Attached: Form 10916(c)

Send the letter to:

Internal Revenue Service
Centralized Lien Operation
P.O. Box 145595, Stop 8420G
Cincinnati, OH 45250-5595

Include a copy of Form 10916(c), Withdrawal of Filed Notice of Federal Tax Lien. This is the form that the IRS will send to you after they approve your application to the Fresh Start Program.

The IRS may be slow to respond to your request, but it should start the process.

Step Five: Dispute the Tax Lien through the Credit Bureaus

Besides asking the IRS to remove the Tax Lien, dispute it through the credit bureaus. Be sure to reach out to all three credit bureaus.  When you dispute the tax lien, the IRS will have 30 days to confirm that they withdrew the tax lien.

You can use the sample letter provided by the FTC when you dispute the tax lien. Be sure to include a copy of Form 10916(c) as evidence of the tax lien withdrawal. The table below contains the website, address and phone numbers for the dispute departments for all three credit bureaus.

EquifaxP.O. Box 105069
Atlanta, GA 30348-5069
Get Started866-349-5186
ExperianP.O. Box 9554
Allen, TX 75013
Get Started800-509-8495
TransUnionFraud Victim Assistance Department
P.O. Box 2000
Chester, PA 19022-2000
Get Started800-916-8800