Tax liens are a serious problem. These are judgments against either your property or credit report for outstanding taxes. The federal and state governments are not private lenders and need not follow the standard collection policies. Instead, the IRS and state departments of revenue can garnish your wages and place levies on your bank accounts. If you have a tax lien in Massachusetts you need to first determine the reason and then make a plan to remove it.
Go online to your Massachusetts (MA) Registry of Deeds. Nearly all towns in Massachusetts now have online deeds. Search for your property address and name. A copy of the tax lien will show up in the search results. Print this out. Look and see if it is an IRS lien or a Massachusetts Department of Revenue lien.
Fight the tax lien if it is unwarranted, expired or paid. You must collect ironclad evidence to support your argument if you choose to fight the lien. You must present documents (paid in full letters, bank statements, cancelled checks) to either to IRS or the MA Department of Revenue. See Resources for the contact information for these two institutions.
Contact either the MA Department of Revenue (DOR) or the IRS if the lien is in fact valid. Do this as soon as you become aware of the lien. Ask about repayment programs. Both of these institutions are willing to remove tax liens if you agree to an installment plan.
Ask to make a good faith, lump-sum payment on the tax lien, especially if the lien is old. Offering a one-time payment will show the tax collectors your willingness to honor the debt. This may help grease the skids when asking for a favorable repayment plan.
Get any negotiated debts or repayment agreements in writing. Before you sign on for an installment plan, you should review the terms with a trusted financial advisor (such as your accountant).
Do not sign the agreement unless it includes a provision that the tax lien will be removed from your home and credit report once you begin repayment. This will help to rebuild your credit and free up your home for future lending.
- City of Boston: Real Estate Taxes
- Internal Revenue Service. "Understanding a Federal Tax Lien." Accessed Sep. 18, 2020.
- Experian. "Tax Liens Are No Longer a Part of Credit Reports." Accessed Sept. 18, 2020.
- Experian. "What Affects Your Credit Scores?" Accessed Sep. 18, 2020.
- Federal Trade Commission. "Fair Credit Reporting Act 15 U.S.C § 1681," Page 22. Accessed Sep. 18, 2020.
Based in Eugene, Ore., Duncan Jenkins has been writing finance-related articles since 2008. His specialties include personal finance advice, mortgage/equity loans and credit management. Jenkins obtained his bachelor's degree in English from Clark University.