Also, it seems states may not be too far behind in allowing the withdrawl of paid liens, just found this article from May for California:
Wyland Legislation to Help Taxpayers and Small Businesses Advances
FOR IMMEDIATE RELEASE: May 11, 2011
CONTACT: Julie Hooper @ 916·651·4038
— Today, legislation authored by State Senator Mark Wyland (R-Carlsbad) and sponsored by Board of Equalization Member George Runner unanimously passed the Senate Governance and Finance Committee with bipartisan support.
Senate Bill 228 would allow the State Board of Equalization, the Franchise Tax Board or the State Controller to withdraw paid tax liens.
Under current law, California’s tax agencies can place a lien on a taxpayer’s property when the taxpayer is unable to fulfill their tax liability. The same taxing authorities can release a lien when a taxpayer pays off their outstanding obligation along with any additional interest and assessed late fees. However, a withdrawal is needed to remove the lien. Tax agencies do not have the statutory authority necessary to withdraw a tax lien, even if it was filed in error. Without a withdrawal, the lien affect a taxpayer’s credit score for up to ten years.
“It is difficult for an individual or business to get a loan if their credit report shows a tax lien. As a former small business owner, I know how important it is to be able to secure a line of credit.” said Wyland.
SB 228 would conform California’s tax lien withdrawal procedures to the federal procedures implemented by the Internal Revenue Service (IRS) 10 years ago.
“During this difficult economic time, we need to do everything we can to help businesses get a fresh start. This is a pro-consumer, pro- small business bill that will help thousands of Californians,” Wyland said.