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

The Tax Resolution Real Estate Agent Business Model

This weekend, I’m packing up my worldly possessions and departing for the long trek to Salt Lake City. I’ve mentioned this in passing on webinars and emails recently, along with the fact that I’ve been studying for both the real estate agent exam and the Series 65 exam. This has caused a fair amount of confusion amongst viewers and readers.

To catch you up to speed, after leaving my day-to-day role at my software startup, Prolaera, last summer, I decided that I would reboot my tax resolution practice and build another boutique firm. I spent an entire month doing nothing but evaluating various business models, service options, and other important considerations for starting a new business. What I ultimately decided on was to integrate my personal real estate investing strategy into a tax practice, and build a hybrid tax/real estate brokerage/financial advisory practice all centered around a specific strategy for acquiring rental properties.

The tax resolution aspect focuses on doing only lien withdrawals, subordination, and discharge work to help facilitate real estate transactions (the lien work only model).

Moving to another geographical areas wasn’t originally part of the concept. However, as I started the search for my next rental property purchase, the local market conditions, driven by spillover from Seattle’s blazing hot real estate market, started to look less and less desirable to me. I’m not a fan of rapidly increasing prices, low inventory, and multi-offer situations. That’s just not a game I like to play when it comes to real estate. So I started contemplating a relocation.

As you may have seen last week in the market area selection video I unlocked for a few days, I think it’s very important to be strategic about the decisions you make in your tax firm. Since I happen to have the flexibility to change my geographic location without disrupting anything else in my life, I made the choice to do so. After researching several other markets, including Vancouver, WA, Klamath Falls, OR, Boise, ID, and Bozeman, MT, I ultimately decided that the Salt Lake City area was the best fit for me for the next few years.

Why Salt Lake? I have a long laundry list of reasons. Here is a short sampling of the bigger reasons:

  • A balanced real estate market with plenty of inventory in “blue collar” neighborhoods with homes priced well under $300,000 – my preferred type of rental property.
  • An
… Continue reading

Free Tax Resolution Kindle Book Week

This week, through Saturday, all of my titles published on the Amazon Kindle platform are available at no charge. Whoot, whoot!

For the rest of the week, the following titles can all be downloaded to your Kindle reader, your smartphone, even your computer (Amazon has apps for every platform).

Tax Season Profitability Guide: 8 Big Ideas For a More Profitable Tax Season (all 8 ideas also apply to every other service you offer)
Effective Copywriting for Accounting Professionals
Tax Resolution Secrets (written for consumers, not tax pros, 2011)
How To Build A Million Dollar Tax Resolution Practice In 12 Months Or Less
The 80-Hour Workweek: A Practical Guide to Escaping the Bonds of Mediocrity and Getting More Out of Life (not really about tax resolution, but it has some useful ideas if you’re interested in a non-traditional, virtual, or semi-retirement type of practice)

In addition to that, I’ve temporarily dropped the prices on all print books in my Amazon catalog by 50% or more, including The Tome:

The Complete Tax Resolution Practice: Uncovering the Lucrative Opportunity Hiding Inside Your Tax Practice (released in 2013, but not much has changed)

If you don’t already have these, I encourage you to take advantage of the opportunity. Again, the Kindle book promotion ends on Saturday (Amazon has a 5-day limit on these). After reading, I’d appreciate you taking 30 seconds to leave a review on Amazon.… Continue reading