Dealing With Tax Delinquency
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Dealing With Tax Delinquency

Dealing With TaxDelinquencyFrank O’ 228-3255Kevin Appel, Esq.Tax Collection 380-3501

Why Bother?“Taxes are the price of civilization.”- Justice Oliver Wendell Holmes“Taxes are the life-blood of government,and their prompt and certain availabilityan imperious need.”- Justice Owen J. Roberts

Preventing Tax Delinquency(Positive Measures)• Alternative Payment Methods – e.g.Credit Cards, on-line payments• Alternative Payment Locations• Early Warning System – “You havebill!”• Robo Calls• Taxpayer Assistance Program

Credit Cards• Arrange with local bank• There will be a “convenience fee” ofabout 3 percent• Taxpayer pays fee for “mandatorypayments” (e.g. taxes, utility bills).• Locality pays fee for “discretionarypayments” (e.g. recreation programfees).

Face to face payments can also bemade at more than 40Global Express Financial Serviceslocations throughout the area.

Global Express• Locations:• Shopper’s s Food Warehouse• Safeway• Check Cashing storesPay the following types of bills:• Personal Property Taxes• Decal Fees• Real Estate Taxes• Parking Tickets• Water and Sewer Bills• Pay only by Cash or proceeds from Cashed Pay Check

Bill Payer Notification“You have bill!”• At County website, Taxpayers sign up andidentify property for which they areresponsible and their email address.• Whenever a debt is incurred, they areimmediately sent a “You have bill!” email.• The email links them automatically withthe Payment Portal.• 48,000 Arlington taxpayers have signedup, to date.

Robo Calls• Three days before the real estatedeadline, we create a file of unpaidaccounts and addresses.• The file is sent to a communicationsfirm, who research the phone numberfor each address.• Two days before the deadline, the firmplaces a robo call to each of, perhaps,5,000 households at 10AM.

Hello, this is the ArlingtonCounty Treasurer’s s Office callingto remind you that Real Estatetaxes are due this Thursday,October 5th. If you have notreceived a bill, please call 703-228-4000. You should disregardthis message if you have alreadymade your payment. Thank youand have a nice day.

Taxpayer Assistance ProgramHelps taxpayersmeet their taxobligations byoffering them theopportunity toapply for a shortterm loan to covertheir tax bill.

Taxpayer Assistance ProgramHow does it work?•Bank provides a short term loan to taxpayerwithout a credit check. Treasurer guaranteesloan.•The loan is used to pay the taxpayer’s bill.•The taxpayer pays a fee of 10%, which is equalto the late penalty payment.•The bank immediately pays the Treasurer theamount of the taxes.•The taxpayer pays back the loan in six to tenmonthly installments.

Taxpayer AssistanceIf you require financial assistanceto pay your real estate taxes,please call703-228228-4000before Wednesday, October 5!

Despite yourbest efforts…


Types of Tax Debt• Real Estate Tax• Personal Property Tax• Business License Tax• Meals Tax• Other Custodial Taxes• Other General Forms ofDebt

Other general debt assigned byDepartments within the County• Parking Violations• Ambulance Fines• Park and Recreation fees• Library Fines• Department of HumanService charges• Liability Damages

Prerequisites for Success inCollecting Delinquent Taxes• Aggressive,Assertive Attitude• Independence ofAction• Leadership• ComputerSupport• Due Process• Swift Action• Enthusiasm• Ingenuity• MaximumCommunication• Moral Qualities• Knowledge ofLaw$$$ Funding $$$

Actions allowed under Virginia lawafter only one delinquency notice:• Lien BankAccounts• Seize Vehicles• Seize Wages• Seize Rents• Set Off Debt• Divert CountyPayments• Withhold CountyDecal• Withhold Renewal ofState VehicleRegistration• Publish Delinquency inMedia• Report Delinquency toCredit Bureau• Hire Private CollectionFirm• Seize First Born

DISTRESS!• Seizure of Personal Property to enforcethe payment of taxes, to be followed byits public sale if voluntary payment isnot made• Available in all jurisdictions• May be done by treasurer in somejurisdictions, by sheriff or other officerin others• May be limited to treasurer’s s locality

+=Arlington CountySheriff’s s Department

Think Big!

The Tag Reader

How does it work ?• The camera uses infrared (I/R) technology alongwith a high powered processor to match thelicense plate number to an onboard delinquentdatabase.• The camera can read a tag up to 600 times persecond for accuracy• When a tag matches the database the systemgives an audio alert• An image of the tag is displayed on the screenalong with the delinquent information

A Hit!

What happens when amatch occurs?Step 1 - The tax officercompletes and places a seizureform on the vehicle along with awindshield sticker notifying thedebtor the vehicle is not to bemoved until full payment is made

Hard to miss.

What happens when a match occurs?Step 2Remove tags

What happens when a match occurs?Step 3 – And/Or boot the suck’a

A Formula for Success!(The Lien Machine)OCR + MICR = Bank Lien =$$$$$

A Trick of the Trade• Install Caller ID.• While the taxpayer may receive our noticeat home, he or she will likely call us fromwork.• Now we know their daytime number!• We then use the reverse phone book tofind out who their employer is.• Now we have an employment lien source!

Technical AssistanceExcellent Virginia-based consultingservices are available at reasonablecost to structure an in-housecollection program and to train staffin collection procedures. This mayinclude implementation of anautomated collection process.

Role of theAutomated Collection System• Prioritizes collection activity• Packets multiple debts• Assigns delinquent accounts (WIP)• Tracks collection staff productivity• Generates all notices• Schedules and prepares liens and seizures• Secures credit rating data• Calculates penalty and interest• Address tracking• Court process• Bankruptcy tracking• Documents debtor contacts and discussions

Role of Private Collector• Supplement limited resources• Private Collector concentrates ondelinquencies• Older than 1 year• Out of state accounts• Problem accounts• Frees up Staff to go after recentdelinquencies (lower hanging fruit)

Statutory Authority forHiring Private Collectors• Code of Virginia § 58.1-3919.1 (Treasurercan hire with “consent” of governing body).• Code of Virginia § 58.1-3934 A (locality canhire with “consent” of Treasurer)• Code of Virginia § 58.1-3934 B (locality canremove accounts from Treasurer andappoint a collector; Treasurer no longerresponsible for accounts – “HostileTakeover”)

Hiring a Law Firm• Competitive Process Not Required to HireLawyer or Law Firm - Code of Virginia§2.2-4344 A 2.• Collection fee is limited to 20%, paid bytaxpayer, not locality• Letter from an attorney proven to be moreeffective than notice from a “collectionagency.”• Able to use attorneys in other States toenforce Virginia judgments

Federal Offset of Local DebtMake it work!(It will be worth your while!)

The Basics of Debt OffsetDIDOData InDollars Out!

The History of Federal Offset• Created in the 1980’s s to allow states tosubmit unpaid child support debt to offsetthe Federal tax refunds of the “deadbeatdads.”• Expanded to include debt owed to theFederal government (such as delinquentHUD loans).• In 2000, states were allowed to submitdelinquent tax debt.• The Future?????

Participating States in theFederal Debt Offset ProgramAlabamaArkansasArizonaCaliforniaConnecticutColoradoDelawareGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMinnesotaMississippiMissouriMontanaNebraskaNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaUtahVermontVirginiaWest VirginiaWisconsinWashington, DC

The ObjectiveTo allow states participatingin the Federal Programto submit delinquent taxesowed to localitieswithin the State.

Status of Current Legislation• Supported by Congressman EricCantor.• To be introduced into HouseWays & Means by ChairmanDavid Camp (MI) andCongressman Richard Neal (MA).• When???

The Compendium

Compendium Content• Researched collection lawsin each state and province.• Determined collection toolsavailable.• Analyzed differences amongtools.

Compendium Goals• Propagate and encourage useof effective techniques.• Encourage development ofnew techniques.• Provide sample statutes.

Final Collection Tips• Tell them what you aregoing to do.• Do it!• Tell everyone else what youdid.

Fiscal Year

Taxbusters Decimate DelinquencyO’Leary Reelected with 79% of the Vote!

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