Got a Tax Levy - What happens to Credit Score now ?

[gaurav811]

Toda,m I found out that I owed $350 in taxes to NY state after I checked my bank statement. The NY IRS told me that they found an issue with my 2005 state taxes filing.They found the problem in Jan 2009 and sent me a bill then.

But since I had moved from the address which was on file I never received any mail. Till today I have not received any mail from them. The collections agency somehow found my present address and bank info and put a levy on my account.From what I was told it was an honest mistake on my part in filing the taxes incorrectly. But now I suspect its going to hurt my credit score really badly. I was preparing to buy a house this year and this will severely undermine my ability to get an affordable mortgage rate.

I checked my credit report and everything looks ok for now.(My average score with three credit reporting agencies is 785).

Do you think, since it hasn't shown up in the credit reporting records till now, it won't
show up in future ?

Since the full amount has been deducted from my bank account, would the credit reporting agencies be able to update my credit score even after the account is closed and paid off fully ?

Can I defend myself since I honestly did not know about this amount due and the bill was generated in Jan 2009 , three years after I filed my NY state taxes. I moved out of NY in Jan 2006.

Please help.
Thanks in advance.

[frogger]

It will probably show up in the future. Can you defend yourself? You can try, but you have admitted that you were wrong, so therein lies the rub. You can however, try to talk to the ca if it shows up and see if they will remove it.

If not, you can always write the credit reporting agencies and have a note attached to that file with an explanation of the events that occurred.

[catleg]

I think the only way a credit bureau would find out about it, is if it was reduced to judgment in a court or docketed against real estate.
If you just owed money and they took it out of the bank and they're done with you, I doubt it will ever appear on your credit file.

[frogger]

I think the only way a credit bureau would find out about it, is if it was reduced to judgment in a court or docketed against real estate.

Possibly, but most of the collections software packages automatically report credit on all reportable accounts unless it is flagged to not report. That is why my advice would be to speak with the ca and have them flag the account to not report.