The city of Danville’s effort to ramp up its pursuit of delinquent real estate taxes has yielded marked success. In four months, the city has recovered more than half a million dollars that had eluded collection.
Now, the city hopes to duplicate that success as it prepares to chase delinquent personal property taxes and utility charges.
“In the next phase of delinquent collection efforts, we will assign personal property tax accounts and utility charges to the same law firm that has been helping us collect real estate taxes,” City Finance Director Barbara Dameron said Friday. “Consequently, all citizens should promptly pay all delinquencies to avoid adverse collection action and the imposition of additional collection fees and costs.”
The law firm, Taxing Authority Consulting Services, P.C. (TACS), specializes in government collections and represents finance departments, treasurers and tax collectors throughout Virginia. The city contracted with the firm in November.
Since then, TACS has collected more than $550,000 in a four-month period. In comparison, collections totaled $757,900 by a previous agent over a three-year period.
A change in approach, Dameron said, accounts for a significant portion of the increase in collections. With the previous agent, the city did not turn over accounts for collection until they were delinquent for two years.
Under the new process, as soon as an account is legally delinquent, the city notifies the taxpayer of the delinquent amount. Payment is required within 30 days. If the debt remains unpaid, the city submits the account to TACS for collection.
TACS adds a 20 percent fee to the delinquent accounts. The firm may add other costs incurred in collection efforts to the delinquent accounts.
“Delinquent taxpayers are responsible for the additional fees and costs, so there is absolutely no cost to the city,” Dameron said.
In collecting these accounts, Dameron said TACS and the city’s Finance Department may pursue all means of collection authorized by law, including the attachment of wages or other assets.
When real estate taxes remain unpaid for two years or more, TACS can commence proceedings to sell the property. Once an action to sell the property has commenced, the property owner is liable for all costs and attorney’s fees incurred in addition to the tax, penalty and interest assessed on the property.
The city anticipates TACS will publish an initial advertisement of properties subject to sale within the next month.
As a matter of policy, the city does not enter into agreements or “payment plans” for the collection of delinquent taxes. The city does permit TACS to make pay arrangements within specific parameters. Delinquent taxpayers who owe $1,500 or more may enter into payment plans requiring a 25 percent down payment and payments spread over 12 to 18 months.
As part of the agreement, the taxpayer must keep their current taxes paid.
Delinquent taxpayers owing less than $1,500 may be eligible for similar payment plans with payments spread over three months.
In addition, delinquent taxpayers may make payments on their account at any time, with or without an agreement. However, once the account has been released to TACS for collection, the taxpayer is responsible for the collection fee and cost incurred in the collection effort.