About Tax Liens

• The IRS changes it policy periodically about when it files a tax lien. As of 2011, the IRS only files a tax lien or levy when you owe at least $10,000 in unpaid taxes, according to Matthew Scott of DailyFinance. The only way a private investigator or someone conducting a background check can find out about IRS debt in most cases is if the IRS makes notice of the debt a public record by filing a levy or lien. The consumer credit reporting bureaus will then pick up any such notice.
  
  

Consumer Credit Report

• If you owe money to the IRS and have a lien or levy as a result, the debt probably will show up on a background check, because a consumer credit report is part of a standard background check. The national credit reporting bureaus can report tax liens and levies indefinitely in most states, although some credit bureaus may have a shorter reporting period for them. If you pay off a tax lien, the credit bureaus can still report it for seven years.
  
  

Withdrawn Tax Lien

• As of 2011, if you pay a tax lien in full, the IRS will withdraw the lien if you request the agency to do so. The IRS will not withdraw the lien if you negotiate what is called an Offer in Compromise that results in you paying less than what you owe the IRS. The IRS sometimes settles for a fraction of what you owe if you cannot ever afford to pay the entire bill. The IRS will release the lien after settling the debt so it no longer encumbers your property, but the credit reporting bureaus will still report the lien, as paid, for seven years. It is possible, though, for you to satisfy a tax lien by negotiating an agreement to pay the full debt off in installments.
  
  

Tip

• Ask the IRS for an installment agreement before the IRS has to place a tax lien on your property. In general, the IRS places a lien on your property if you do not remit payment within 10 days of the notice of the intent to file a lien. Run your credit reports from Annual Credit Report for free and check for other delinquent debts. Try to pay off any delinquent debts or make arrangements to make their status current.