Federal Tax Liens & COVID-19

As part of the IRS response to the coronavirus pandemic, most IRS Collections activities have been suspended. See this memo on IRS.gov.

This includes the filing of new Forms 668-Y, Notice of Federal Tax Lien. No new tax liens will be filed through July 15, 2020.

Since most county clerks are usually a few weeks behind on processing tax liens sent to them by the IRS, the availability of new tax lien data will begin to taper off over the course of the next several weeks. By mid-May, new tax lien filings will no longer be processed.

Due to this, it’s important to remember that aged tax liens usually produce equally successful marketing results as new liens. We recommend going back up to a full year to download older tax liens from our database for your telemarketing, direct mail, cold email, and PPC marketing efforts.

If you are not yet doing cold email and pay-per-click advertising, these methods can be added to your marketing strategy by running the tax liens through email append services (search the Internet for such providers, we do not offer that service). Then, upload those lists as custom audiences to your PPC ad platform, or do cold email, but be sure to apply all applicable best practices for cold email and comply with CAN-SPAM requirements.

Just because IRS is not currently filing new tax liens does not mean your marketing efforts need to stop. With some slight adjustment, your marketing campaigns can continue producing results for your business.… Continue reading

How many Federal tax liens are filed each year?

The IRS files far fewer Forms 668-Y, Notice of Federal Tax Lien, than most tax professionals presume. In fact, the number of liens filed each year has been rapidly dropping over the past several years.

According to the annual IRS Data Book, here are the number of IRS tax liens placed on public record each year:

2009: 965,618
2010: 1,096,376
2011: 1,042,230
2012: 707,768
2013: 602,005
2014: 535,580
2015: 515,247
2016: 470,602
2017: 446,378
2018: 410,220

As you can see, the number of tax lien records filed by the IRS peaked in 2010 at just shy of 1.1 million. In the intervening eight years, annual lien filing volume has dropped a whopping 63%.

At the same time, however, the number of IRS Collections cases has been steadily increasing each year. In 2010, the IRS started the fiscal year with 9.6 million open tax debt cases. We started fiscal year 2018 with almost 14.1 million open tax debt cases, and increase of 45%. It’s interesting to note that the number of tax debt cases, and the dollar amount owed to the IRS, has skyrocketed during one of the strongest periods of economic recovery in American history. This clearly indicates that many small businesses and individuals have still been feeling the impact of the 2007-2008 crash many years after it happened.

So why has the IRS been filing fewer tax liens? There are a number of reasons.

First of all, the federal government has a statutory tax lien over any tax debtor, whether they file the 668-Y or not. Thus, it’s not actually necessary for the IRS to file the lien to take collections action. The filing of the lien merely perfects the government’s lien and establishes priority under state law.

Second, the service made changes in 2011 and 2012 under the IRS Fresh Start program. These changes increased the minimum lien filing threshold from $5,000 to $10,000 in most cases. In addition, expansion of Streamline criteria that allowed for the 668-Y to not be filed also came into play.

Lastly, we all know that the IRS has been under significant budget pressure for years. The IRS, just like anybody else, must pay a filing fee to the local county clerk and recorder or the Secretary of State in order to file the document. These fees are typically only $15 to $50, but across a million tax liens, that dollar amount really adds up. The Centralized Lien … Continue reading

Increasing the Utility of Your Federal Tax Lien Lists

Federal tax lien lists are useful for a variety of lead generation purposes. However, far too many firms use these lists for only limited purposes. This article will explore several methods for increasing the utility of those tax lien lists you have.

First, make sure that you are running all tax liens through the National Change of Address (NCOA) database. Numerous companies provide this service, just do a Google search to find one. You can also obtain this service through a local direct mail service provider or list broker in your area, if you prefer to do business with local companies.

Not only is NCOA processing required by the US Postal Service, you’ll discover that it also reduces your returned mail volume substantially. Tax liens are, by definition, filed against companies and individuals that owe money to the government. Chances are, they also owe money to other organizations. As such, it is not uncommon for the businesses to close, and individuals to move. It’s simply the nature of the beast. Since tax liens are filed using the last known address, this is what goes into our database. Returned mail volumes of 15% to 30% are not uncommon when doing mailings to tax lien lists that have not been NCOA processed.

Second, if you are doing telemarketing, run the lists through a telephone data hygiene service and/or a phone append service. This will make sure you have the best phone numbers possible for your telemarketing efforts. Our database is connected to a robust phone append API, but that’s just one database. So even if you get phone numbers from us, it may still be worth your while to process them again through another service.

Third, don’t throw away your old tax lien lists. Tax debtors are bombarded by a tidal wave of tax resolution firms during the first two weeks after the tax lien is filed. Then, with the low hanging fruit gone, fewer companies are contacting them. After a few months, nobody is calling or mailing.

Every few months, pull up those old lists, and mail and call them again. For businesses that accrue new liabilities every quarter, they are starting a new collections cycle every 3 months, but a new lien may only be filed once a year. For individuals, the problem doesn’t go away even if it’s not addressed and the IRS isn’t taking enforced collections action at the present time.… Continue reading