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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15432
Experience:  15years with H & R Block. Divisional leader, Instructor
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State of Ohio tax liens

Resolved Question:

State Tax Liens (Not IRS)

I have a tax lien in the state of Ohio's records going back about 10 to 13 years ago. (The lien is not on any properties it is just in their records) this was the result of state income tax issue. They claim I owe them approx. $3,500 and there is an additional lien stating about $3500. I do not know whether this is a mistake or the extra one is penalties and interest??

These are located on my credit bureau reports. My other issues on my credit reports are very good with a relatively high credit score. However, I would like to eliminate these liens from my credit report.

A few facts before I continue. The state of Ohio has never billed me or contacted me on these tax liens. However, it is probably because I lived overseas in the Caribbean for eight years. Furthermore, I finished my employment in the Caribbean where they furnished me with a home. I moved to Florida and purchased a home and eventually the state of Ohio may locate me and try to collect the monies due or place a lien on my home.

My questions:

1. Will the state of Ohio Department of Revenue accept a settlement amount for the monies that are due on these liens? Can I negotiate? Will the state of Ohio agree to completely take it off my credit report if a settlement is reached, and I pay 100% of the settlement amount? (or are they not allowed to completely remove this lean information from credit bureau reports because of some type of statue, policy, or rules.) When I refer to completely remove I'm not discussing the state of Ohio simply stating the liens were paid but completely removing from the credit bureaus after I pay them the settlement amount. Only stating they were paid will not remove. They will be on for 7 more. In my research, I see the IRS will remove 100% of their tax liens if specific things are done and certain forms are submitted after they are paid o an installment agreement has been put together. However, I am not sure on state liens?

2. Do you recommend I get an attorney to do this or simply contact them anonymously and ask the questions in 1 above? If this works, and they state they can completely release the lien info from my credit report, and they will be able to negotiate should I contact a lawyer at that time to negotiate the documents so what the state says really happens and negotiates a settlement amount.

Thanks for your help.

Submitted: 5 years ago.
Category: Tax
Expert:  Robin D. replied 5 years ago.

Hello and thank you for using JustAnswer.

If you settle the tax debt and you have no question as to the validity of the tax owed, the lien will not be removed by the state from your credit report. As the Ohio department of revenue puts it "The Department of Taxation does not forward information to, nor receive information from the credit bureau". The state will not request that the lien be removed even after it is marked paid. If the amount is paid in full you then, as the consumer can request that the paid lien be removed from your report. The state will not assist in having the report altered. If you do want to speak with anyone about the lien you would need to contact the Attorney General's office. For business taxes call 1-***-***-****, for individual taxes call 1-***-***-****.

You can use a tax attorney to negotiate the settlement or Offer in Compromise with the state. That really would depend on how much you wanted to pay to an attorney to complete the paperwork for you.

Although law was passed to require credit bureaus to remove the federal tax lien when presented with evidence the lien was paid I have to say I found no such remedy for state tax liens. Some states will actually contact the credit bureaus especially if the lien was filed in error but Ohio does not and will not do that.

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