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.

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 Unit has a budget just like any other government department, and thus they must be judicious about which liens they file and which they don’t.

All these factors lead to a steady decline in the number of tax liens that we see.

This obviously impacts the number of federal tax liens that are available for us to collect, and it directly impacts your ability to do marketing. Here are a few marketing tips to help you address this particular issue:

1). Make better use of the tax liens that are filed. Too many tax resolution practitioners fail to maximize the effectiveness of their mailing and call lists. The single biggest mistake is only mailing one time. Do multi-hit marketing campaigns, or don’t do them at all, as it will simply be a waste of money. Also, reach out through multiple channels. Send mail AND make phone calls, not just one or the other. Do phone appends on liens to find additional phone numbers, and consider even doing email appends and sending personalized emails to those few liens that will come back with an email address.

2). Branch out with STATE tax liens, not just federal. Oftentimes, state revenue departments can file a state tax lien at no charge with the necessary in-state agencies. People that owe the IRS also often owe their states. Tax Liens HQ does not currently pull state tax liens, but we can do so on a case by case basis. If this is something your business would be interested, contact us with the jurisdiction of interest. Please note that there would be an additional charge for this service.

3). Look beyond tax lien marketing. No business should have a single source of clients. You never know what will happen to the one marketing strategy you use. Government regulations, problems like this decreasing federal tax lien filing volume, etc. could severely impact your business if you only have one source of new clients. Become a student of marketing, and expand out to embrace at least three different lead generation strategies that are independent of each other. For example, look into buying leads from various vendors (just search on Google), create a referral strategy, test broadcast media and PR strategies, advertise on social media platforms, etc.

By making better use of the federal tax liens that are filed, and embracing additional marketing strategies, your business can not only survive, but thrive in spite of this IRS lien issue.

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.

Finally, consider checking tax lien lists against other demographic databases. Your ideal client fits a certain profile (if you don’t know what that profile is, then take the time to uncover it). Based on this, you can use demographic and psychographic data that is commercially available to find tax debtors that most closely match the profile of your perfect client. This is called a “merge/purge” by mailing list brokers (which is exactly what taxlienshq.net is, after all), and enables you to create a laser-targeted contact list for your marketing campaigns.

Do these additional steps require a financial investment? Absolutely. But they’re all an investment in magnifying the ROI of your overall marketing efforts.

Detailed Explanation of Tax Lien “Token” System

In the past, this service has operated under a variety of different pricing options. Most often, there were tiered pricing plans, with decreasing per-lien costs for each tier.

In order to create a nice, even number of tax lien downloads for each tier (say, 600 instead of 589), each tier credited an amount to your account that was actually different than what you paid in dollars.


Yeah, it was on our end, too!

So, here’s an ode to simplification. All that other crap is gone now. Instead, we’re now using a token system.

Remember old video game arcades that ran on tokens? When I was a kid, these stores all operated the same: For every game, there was a very simple system: 1 token = 1 game play.

Trade dollars for tokens, then play games. Very simple, very straightforward.

Compare that to some other arcade places. Some games were two quarters, some were three quarters, etc. This is basically equivalent to how this site used to operate.

Now, we’re using tokens. From now on, pricing will be quoted based on how many tokens you get. Then, it’s simple: 1 token = 1 tax lien.

Phone numbers will continue to be provided free of charge for those lien records that we are able to find a phone number through our search system. Whether there is a phone number or not, it’s still 1 token = 1 tax lien.

I think this much simplified system will avoid confusion over the mismatch between amounts paid and amounts credited, in particular.

Please note also that we are eliminating the Unlimited tax lien plan, for everybody. There will be no grandfathering of accounts. All users will be switched to the NEW token-based plan that is closest to your current monthly fee. If you would prefer to cancel your subscription instead, then please let us know and we will stop your billing.

One last thing: This site has never had a defined “minimum order” policy. However, the new $199 plan essentially represents a monthly minimum order. As such, read this carefully: Monthly tokens are like cell phone minutes — they DO NOT roll over from month to month. Use ’em or lose ’em, in other words.

Please understand that all of these changes are intended to make this service sustainable. Now that I’m running the site again, it MUST be self-sustaining: I refuse to come out of pocket again like I was doing in 2013 to operate this thing. I’m a tax resolution practitioner just like you, so this site needs to be operated like a real business, not a hobby. If it’s not self-supporting, I’ll simply shut it down.

Federal Tax Liens Lists: Not Just For Tax Resolution

The average individual (1040) tax debtor for whom a federal tax lien is filed has approximately three years of unfiled tax returns that they will need prepared. As tax return filing season begins, it is a good idea to remind you that tax lien lists can be used to obtain new tax return clients, not just tax debt resolution clients.

By specifically targeting your direct mail marketing in particular to 1040 tax liens in your local area, you can bring in new 1040 return clients without ever even mentioning the tax lien, the tax debt situation, or even the unfiled returns.

The offer of reviewing the previous three years of tax returns has been a very successful marketing tactic for national tax return preparation franchises. When marketing to tax lien lists with a similar offer, you are reaching out to a target market that is more in need of this service than just about anybody else out there. Offering a free review of previous years of tax returns will speak to this market, and you never even have to mention the tax debt situation.

Since you can get market intelligently without mentioning the tax debt, sending postcards to federal tax lien lists of individuals with a tax lien filed against them will not seem unusual or raise any “red flags” in the prospect, since they will view it as the kind of tax season marketing that they’re already seeing this time of the year. You will need to differentiate yourself with a solid USP and a unique offer, but it will not raise the ire of the recipient in the way that some forms of tax resolution marketing sometimes can (which is just part of the territory, but this lets us avoid that).

If you are a licensed CPA or Enrolled Agent, I would highly encourage you to add local 1040 tax lien marketing to your tax season marketing plan. Send multiple postcards and letters to those tax liens in your immediate service area, spread out every ten to fourteen days, for the entirety of tax season. Don’t let these prime tax clients slip away!

Site update completed – yay!

The migration of this system to a new server is complete.

The server migration came with a significant number of changes to the code base that the site runs on, which introduced a lot of bugs (mainly login issues).

These bugs have all been squished, and the site has returned to normal operation. If you are still having login issues, please contact support.

There are a number of functionality updates that we will be applying to the site over the next couple weeks. We will do these at night (U.S. time) in order to minimize disruption of service during the business day.

We hope you enjoy the new faster, leaner tax lien system!

Tax lien database migration and server upgrade

On Saturday, Nov. 16, 2013, we will be migrating the tax lien database and this entire web site to a new server.

Due to the sheer size of the database this process may take several hours. During this time, you will not be able to login to your account, download mailing lists, create batches, obtain data counts, or any other functions.

We have chosen to do this on a Saturday so as to hopefully minimize the inconvenience to our customers. Once moved to the upgraded server, the tax lien database system should be significantly faster.

Thank you for your patience while we conduct this upgrade.

Federal tax lien volume picking up

During the federal government shutdown in October, the IRS stopped filing new federal tax liens. That put a major damper on marketing efforts for those of us that rely heavily on tax liens for our marketing.

We’re starting to see lien volume picking up again finally. There was a full two weeks of nothing, then two more weeks of just a trickle. Literally over the course of the past few days, we’re finally starting to see a significant uptick in lien records we’re picking up. We’re still a long ways from the 400+ liens per day above our $5,000 threshold that we’re used to seeing across the country, but it’s back above 200 per day and growing.

This hickup in the flow of lien filing was a good time to remind ourselves about two important marketing rules:

1). Make sure that you’re wringing every ounce of value from your existing lien lists by contacting them multiple times over a lengthier time period.

2). Never rely on a single prospecting method to bring in all your clients.

No business, no matter how small, should have less than three different methods for bringing in new leads. Tax lien marketing is lucrative and powerful, but it shouldn’t be the only trick up your sleeve. If you’re not simultaneously utilizing non-lien marketing to help bring in clients, then you’re doing yourself a disservice.

Why mail multiple times to the same lien?

The vast majority of times, with very rare exceptions, you’re going to want to mail multiple times to every tax lien you contact. Why is this?

Let’s consider an example of one hit vs. multi-hit mailing. For approximately the same amount of money, you can send a mailer to 20,000 tax liens one time, or send 8 mailers to 2,500 mailers. If you get a 1% response rate from a one-time mailing, this is considered on the better side of things in the direct marketing world.

A 1% response rate to 20,000 mailers sent one time produces 200 prospects.

For multiple mailers, response rate compounds over time. Studies going back many decades demonstrate over and over that the majority of people respond AFTER the 5th contact attempt. If the aggregate response rate across 8 mailings is 10%, then we have 254 prospects to work with. This is 25% MORE prospects for the same marketing expenditure.

Most multi-hit mailings are built to be sequential, meaning that each mailing piece builds from the previous. This is an incredibly effective way to maximize the return on investment from your lead purchases.