One of the unfortunate possibilities for Nevada residents experiencing tax liens or other tax debt is the potential effect on their credit. Tax time is normally stressful already. For some people, though, a large debt could add to their worry about future credit trouble. Fortunately, the IRS is often willing to work with people who have tax liens or other tax debts. If someone finds it difficult to deal with the IRS, it may be a good idea to seek assistance from someone who is on your side and can work to obtain the best outcome.
Whether due to an accounting error or other problem, some people get to tax day and find themselves surprised by a high bill. This can result in a difficult financial situation, and sometimes people are forced to take out loans to pay the bill or use their credit cards. For many, this is only a temporary fix. One way to resolve this is to request an installment agreement from the IRS, which could allow one to pay the balance down monthly until it is completely paid off. As long as the payments are made, the payments plan may not appear on a credit report.
Tax liens typically affect one's credit. If someone doesn't pay their tax debt bill in a timely manner or if the debt amount is large enough, residents may notice a tax lien on their credit report. Although the IRS has shown lenience over the last few years, tax liens still affect credit negatively and are often shown in the same category as a collection account or bankruptcy. It may be a good idea to explore the possibility of learning if the lien can be taken off of the report once the debt is resolved. If so, once the lien is paid, the credit score may be immediately boosted.
Nevada residents have many options concerning tax liens. Tax law can be confusing for a normal consumer, but it doesn't mean someone is forced to pay a huge balance down all at once. Consumers can often enlist aid to help them make a payment plan or settlement with the IRS. Doing so can make a debt easier to pay and alleviate the possibility of a negative credit report strike.
Source: MSN Money, "5 ways taxes can affect your credit- MSN Money," Gerri Detweiler, Feb. 5, 2013