Once a tax lien is withdrawn by the IRS, it can be removed from credit reports. Is it still something that has to be disclosed on future applications after withdrawal? If an application asks about prior tax liens, I assume I still have to say โyes,โ right?
Thatโs not a common question on most consumer loan applications. โI donโt recall seeing that question on a credit card application, โ says Credit.com credit card expert Beverly Harzog. You arenโt likely to see that question on a mortgage application either. Mortgage applications require you to disclose if you are presently delinquent or in default on any Federal debt, but donโt ask typically ask about prior tax liens that have been satisfied.
But donโt be so sure that just because a tax lien no longer shows up on your credit report that it has disappeared altogether. Joe Kelly, president of ArcLoan.com says that his firm was recently helping a homeowner refinance when a tax lien made a surprise appearance. โThe lien wasnโt on the credit reports, but it showed up in the property records as a lien against the property,โ he explains. โThe homeowner was required to either show proof it had been satisfied or pay it off before the new loan could be completed. โ
So the answer is, โyes,โ you will need to answer truthfully if this question comes up. But itโs not likely that it will.
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