Head Off Delinquent Taxes
Taxpayers have more reasons than peace of mind and avoiding long lines to pay their property taxes on time.
In Travis County, 95 percent of property owners paid their taxes on time in 2008, avoiding the 7 percent penalty and interest that begins accruing on the first day taxes became delinquent. Last year, those tardy taxpayers accounted for about $105 million. About 91 percent of those delinquent taxes have been collected.
“The keys to Travis County’s success are accessibility, a highly integrated collections team and emphasis on serving the public efficiently and with respect,” said Tina Morton, the county tax assessor-collector’s director of public information and training.
Show Me the Money
The benefits to governments and taxpayers of an aggressive and efficient collection program are myriad.
It allows local governments to plan and execute their budgets without worry and keep tax rates low instead of hiking them to cover deficits and collection cost.
It also allows quick and thorough response to taxpayer inquiries, increased public trust, minimized penalties and interest charges and a well-conceived alternative payment arrangement plan to prevent delinquent taxes.
Address the Problem Head-On
Many of the collection efforts come before the Jan. 31 deadline.
In the months leading up to the deadline, effective tax assessor-collectors mount an extensive public awareness campaign that urges financially strapped taxpayers to pay a portion of their bill early and arrange a payment plan for the balance. That campaign includes radio and television spots, news releases and an updated Web site that provides directions on requesting a payment plan. Simplicity is vital.
Taxpayers may request payment plans in person or by phone or e-mail. The request must include the account number, the name of the taxpayer, a daytime phone number and a proposed schedule for paying the taxes. Asking the taxpayer for a plan makes it easier for the collections offer to set reasonable expectations.
Following the plan protects the taxpayer from legal action.
Above all, the process for collecting delinquent taxes requires accessibility. Good communication between both parties leads to high collection rates.
Collect Like Travis County
- Mail a delinquent notice one week after the deadline, demanding payment by Feb. 28.
- If there is no response to the delinquency notice, a demand letter is sent giving the taxpayer 10 days to respond.
- If there is no response to the demand letter, a litigation letter is sent demanding payment immediately and stating that Travis County is in the process of filing a lawsuit.
- After a lawsuit has been filed, the tax office will continue to offer payment arrangements to the taxpayer. However, a judgment must be filed before a formal agreement will be made. A lawsuit will be pursued at this point only if the taxpayer remains unresponsive.
What to do while waiting for responses:
- Identify delinquent accounts to be treated as highest priority and need to be contacted by phone. Typically these are accounts with large accumulated balances and/or in jurisdictions with low collection rates.
- Prioritize personal property accounts. Immediate legal action may be needed to seize the property because some personal property can easily be moved out of the county.
- If the taxpayer responds to the demand letter but is unable to pay all of the tax alternative payment plans remain an option.
- If the taxpayer does not respond and has a history of delinquency, then litigation is initiated.
- At this point, a lawsuit can still be avoided if the taxpayer pays in full or makes some alternative arrangement for payment.