With tax time drawing closer, many people who will owe taxes might be tempted to hide from this unpleasant obligation. That’s a bad idea because, apart from the many ways the IRS can disrupt your life, a tax lien can show up on your credit report. While the IRS won’t report liens to the credit bureaus, these bureaus do seek out information from public records which may mean that your debt with the IRS may be a blemish on your credit report.
Key Takeaways:
- Unpaid taxes can lead to a lot of unpleasant consequences, including tax liens which can cause you some significant credit problems if they end up on your credit reports.
- If you fail to pay your taxes, does the IRS report the debt to the credit bureaus just like any other creditor? The answer to the question is no, they do not.
- Unpaid tax liens, however, are an exception to this rule. The FCRA never requires an unpaid tax lien to be removed from your credit reports, regardless of its age. Paid tax liens, termed “released” liens, do have a credit reporting time limit, however.
“”… just because the IRS or your state taxing authority does not report the debt to the credit bureaus, it certainly doesn’t mean tax liens won’t appear on your credit reports some other way.””
http://www.thesimpledollar.com/unpaid-taxes-and-your-credit/