Thursday, February 1, 2018


Does Owing the IRS Affect Your Credit Score?A strong credit score is extremely important when it comes to qualifying for loans to buy a house, buy or lease a car, and accessing a line of credit whenever you need it.  

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If you owe taxes to the Internal Revenue Service (IRS), you may wonder if this tax debt can negatively affect your credit score.  As you might expect, the answer is somewhat complicated. Here is what you need to know:

Quick Facts About the IRS and Your Credit Score
Your credit score can be impacted if you do not pay your taxes in a timely manner. However, if you file your return, but are not able to pay the full amount due right away, this alone will not automatically mean a lower credit score. Owing back taxes does not automatically translate to a lower credit score.
The amount that you owe the IRS is probably the biggest factor when determining whether your debt will impact your credit score. The only way that your credit can be impacted is if the IRS files what is called a Notice of Federal Tax Lien that gives the government the right to seize your property, including your home and your vehicles. The IRS will only do this if you owe a sizable debt and have not made efforts to pay it even after written notices.  Keep in mind that you will always receive many notices before the IRS files a Notice of Federal Tax Lien.
The IRS is usually willing to work with you to help resolve your tax debt. You may qualify for an installment agreement. This allows you to pay your debt over time rather than in one, large lump sum. An installment agreement is not reported to credit companies. In addition, if you truly cannot afford to pay the debt that you owe, you can apply for an Offer in Compromise, an agreement atha settles your tax debt for less than you owe. It is important to understand that the IRS does not look favorably on those who neglect to file their tax returns (even if you cannot pay your debt) and will not grant relief in many cases unless your returns are current.
Keep in mind that if you use a credit card to pay your tax bill or you decide to take out a personal loan for payment, your credit score can be impacted by those decisions. For example, if you use a significant chunk of your available credit, credit companies will notice and you may see a dip in your credit score because of the change to your credit utilization calculation.
Strategies For Paying Your Tax Debt
Advance Tax Relief can help you determine the best path forward to help resolve your tax debt. We understand that owing the IRS money can be extremely stressful and our team works to develop a unique plan for you that can help you move forward, once and for all.

If you think that you may need help filing your 2017 tax return and past due tax returns or the offer in compromise process, you may want to partner with a reputable tax relief company who can help you get the max refund or resolve your tax balances.
Advance Tax Relief has a offices in Houston, TX and Los Angeles, CA and helps many individuals just like you work with the IRS to solve a wide variety of issues, including penalty waivers.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online.
If you live in Los Angeles, contact us locally and if you live in Houston, TX contact us here

However, it doesn’t matter where you live, we service taxpayers nationwide.

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