Effective Collection of Delinquent Property Taxes The Authorities and

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					                          Effective Collection of Delinquent Property Taxes
               The Authorities and Responsibilities of the Municipal Delinquent Tax Collector
                                        in Tough Economic Times

                                                 Jim Barlow
                                       VLCT Municipal Assistance Center
                                              Brian Monaghan
                                          Walsh and Monaghan, LLP

                      December 1, 2009, Hartford Town Offices, Hartford, Vermont
                       December 3, 2009, Milton Town Offices, Milton, Vermont

                                                     AGENDA
12:30 Registration

1:00   Welcome and Introduction -- The Role of the Collector of Delinquent Taxes in Municipal Government
       In this session, Jim will address the role the collector of delinquent taxes in local government. He will describe
       the various types of delinquent tax collectors, the independence of the office, and the collector’s relationship to
       other municipal officials. He will also discuss liability for such things as neglect of duty, failure to pay tax
       monies to the treasurer, collection of “illegal” taxes, and due process violations.

1:15   Review of the Municipal Property Tax System
       Collection of delinquent property taxes is just one step in the municipal property tax system. We will look at
       the municipal property tax process, when taxes become delinquent, calculation of interest and penalties on
       overdue taxes, and the legal rights and relationships created when property taxes become delinquent.

1:45   Developing a Collection Philosophy and a Collection Policy
       Each collector of delinquent taxes approaches the job differently but there are common elements to successful
       delinquent tax collection. This session will explore the development of a collection philosophy – the unique
       approach each collector will use and in dealing with delinquent taxpayers. It will also explore the responsibility
       to develop a written tax collection policy to inform delinquent taxpayers and guide the collector’s actions
       through the collection process.

2:15   Break

2:30   Delinquent Tax Collection Methods
       This section will address the legal requirements for notifying delinquent taxpayers, accepting payments,
       allocation of partial payments, keeping records and other common issues. It will also review the various
       property tax collection methods available under Vermont law. The session will introduce the concept of debt
       triage and recognizing when more active collection methods are needed.

3:15   Conducting The Tax Sale
       The tax sale is the most commonly used -- and most frequently misunderstood -- delinquent tax collection tool.
       Brian will examine the tax sale process and the importance of using a qualified attorney to assist with tax sales.
       He will also discuss the effect of state and federal tax liens and other issues that can complicate a tax sale.

4:00   Break

4:15   Dealing with Bankruptcy and Other Difficult Situations
       Collection of delinquent taxes is seldom easy, but sometimes issues arise that makes the process especially
       difficult. This section will review the proper response when a taxpayer files for bankruptcy and what a collector
       of delinquent taxes can do to protect the town’s interests. It will also address strategies for handling
       uncollectible debts including the use of abatement.

5:00   Conclusion and Safe Trip Home
                                  Speaker Biographies
                                Delinquent Tax Collection
                                    December 1, 2009
                                    December 3, 2009

Brian Monaghan is a partner in the law firm Walsh & Monaghan, LLP. The firm has offices in
Burlington and St. Albans, Vermont. He serves as general counsel to Vermont municipalities,
large and small, in a wide variety of issues, including land use issues, labor and employment
matters, and delinquent tax collection issues. While in law school, Brian served as a law clerk at
the Vermont League of Cities and Towns Municipal Law Center (VLCT). After graduation from
law school, Brian spent four years as a staff attorney at the VLCT, counseling local governments
in a wide range of issues. In 2006, Brian entered private practice, where he has represented local
governments in the Vermont State and Federal courts against claims for negligence and
constitutional violations. Brian also has extensive experience counseling private and public
sector entities in labor and employment matters, planning and zoning issues, real estate
transactions and tax matters. He lives with his wife, two children, and yellow Labrador Retriever
in Essex.



Jim Barlow is Senior Staff Attorney for the Vermont League of Cities and Towns Municipal
Assistance Center. In this role, Jim has been assisting delinquent tax collectors for five years.
Prior to joining the League, Jim was an associate attorney with Jacobs, McClintock and Scanlon
in Bennington, where he assisted the firm’s clients in a variety of legal matters including
litigation and the collection of outstanding debts. In 2006, Jim spoke at the VLCT property tax
collection workshop on “Strategies for Handling Difficult Situations in Municipal Tax
Collection,” and in 2008 he oversaw the update of the VLCT Handbook for the Collectors of
Delinquent Taxes. Last year he was the lead speaker at the VLCT delinquent property tax
collection workshop. Jim and his family live in Marshfield.
        Effective Collection of
       Delinquent Property Taxes
        Vermont League of Cities and Towns
           Municipal Assistance Center

          Jim Barlow, Senior Staff Attorney
                  December 2009




                      Section 1:
The Role of the Delinquent Tax Collector in Municipal
                     Government

 • The types of delinquent tax collectors.

 • The independence of the office.

 • The ways collectors are compensated.

 • Legal liability for yourself and your town.




                                                        1
    Collectors of Delinquent Taxes
Elected Delinquent Tax Collector. The town (village, city,
fire district or incorporated school district) may elect a
delinquent tax collector for a one-year or three-year
term.
                                      17 V.S.A. § 2646(9)

Elected Tax Collector/Delinquent Tax Collector. The
town may vote to elect a tax collector, who is charged
with collecting both current and delinquent taxes, for a
one-year term.
                             17 V.S.A. § 2646 (8) and (9)




    Collectors of Delinquent Taxes
 Town Manager. If a town has adopted a town manager
 form of government, it may vote to have the manager
 collect taxes (both current and delinquent, unless the
 town has voted to have the treasurer collect current
 taxes).
                                   24 V.S.A. § 1236 (10)

 First Constable. If the town fails to elect a tax collector at
 town meeting and does not provide any other method (e.g.
 town manager), the first constable automatically becomes
 the collector of current and delinquent taxes.
                                             24 V.S.A. § 1529




                                                                  2
  Collectors of Delinquent Taxes
Selectboard Appointee. If there is a vacancy in the office
or the collector is unable to discharge his or her duties
because of sickness or other reason, the selectboard may
appoint someone to be delinquent tax collector for the
town.
                                32 V.S.A. §§ 4799, 4674

Charter Provision. Some municipalities have specific
governance charters that provide that the local
legislative body may appoint the delinquent tax
collector.




     Independence of the Office
An elected delinquent tax collector holds an
independent office of local government.

Absent a charter provision to the contrary, the elected
delinquent tax collector is not answerable to any other
municipal official.

Nevertheless, it is critical that you work effectively with
other officials, especially the treasurer and the
selectboard, in your role as delinquent tax collector.




                                                              3
  Independence of the Office

An appointed collector is subject to oversight by the
appointing body and has significantly less
independence.

For example, the town manager is “subject to the
direction and supervision and shall hold office at the
will of the selectmen, who, by majority vote, may
remove him at any time for cause.”
                                     24 V.S.A. § 1233




           Compensation
Penalty/Commission/Fee. Most delinquent tax
collectors are paid with the fee collected on
delinquent accounts.
                             32 V.S.A. § 1674

Some collectors even pay the operating
expenses of the office (e.g., postage and
stationary) from the fee.




                                                         4
            Compensation
Salary. In some municipalities the delinquent tax
collector is paid a salary set by the voters or the
selectboard.
                                  24 V.S.A. § 1530

Combination. In some municipalities, the collector
receives the fee plus a salary.




            Waiving The Fee
 A collector compensated by the fee on
 delinquent taxes has the authority to waive
 the fee if she chooses to do so.
                               32 V.S.A. § 1674

 Interest and principal cannot be waived by
 the collector, but can be abated by the board
 of abatement.
                             24 V.S.A. § 1535



                                                      5
          Waiving The Fee
If the municipality pays the collector a
salary, the fee cannot be waived by the
collector.
                         24 V.S.A. § 1530

The town manager can waive the fee (but
should get the selectboard’s consent). If the
fee is collected, it must be paid to the town.
                           24 V.S.A. § 1236(10)




               Questions




                                                  6
                Legal Liability
Neglect of Duty. A delinquent tax collector who neglects
his or her lawful duty can be fined up to $100 for each
instance of neglect.
                                         24 V.S.A. § 902

“The treasurer shall deliver such warrant, together with a
rate bill of such delinquent taxes, to the collector of the
town or municipality within it, who shall proceed
forthwith to collect such taxes.”
                                       32 V.S.A. § 4793(a)




                Legal Liability
Willful Neglect of Duty. A delinquent tax collector who
willfully neglects to perform his lawful duties may be
imprisoned not more than one year and/or fined up to
$1,000.00.
                                       13 V.S.A. § 3006

Willful in this context means intentionally or by design.
                       State v. Williams, 94 Vt. 423 (1920)




                                                              7
                Legal Liability

Embezzlement. A town or municipal officer who
embezzles or fraudulently converts to his own use
money belonging to the municipality may be
imprisoned up to ten years and/or fined not more
than $1,000.00.
                                13 V.S.A. § 2537




                Legal Liability

False claims.      A person who in any matter in the
jurisdiction of a municipality makes any false, fictitious or
fraudulent claim may be imprisoned up to 2 years and/or
fined up to $5,000.00 if the loss to the municipality is
$500.00 or less and may be imprisoned up to 5 years
and/or fined up to $10,000.00 if the loss is more than
$500.00
                                      13 V.S.A. § 3016




                                                                8
                   Legal Liability
"no state shall…deny to any person
within its jurisdiction the equal
protection of the laws…"

“…nor shall any State deprive any
person of life liberty or property
without due process of law…”

Fourteenth Amendment, United States
Constitution




                   Legal Liability


     “Every person who, under color of any statute,
     ordinance, regulation…of any State…subjects…any
     citizen of the United States…to the deprivation of
     any rights…secured by the Constitution…shall be
     liable to the party injured in an action at law….”
                                        42 U.S.C. § 1983




                                                           9
    YOU ARE THE GOVERNMENT




                Legal Liability
“In any action or proceeding to enforce a provision of …[42
U.S.C.] § 1983…the court, in its discretion, may allow the
prevailing party…a reasonable attorney's fee as part of the
costs….”
                                       42 U.S.C. § 1988 (b).

Attorney’s fees in this type of litigation can amount to tens
of thousands of dollars.




                                                                10
                     Legal Liability
Bottom Line: This is serious stuff.

    • You are the government, taking people’s property to
       satisfy a legal obligation owed to the municipality.

    • There is no small town exception to the law.

    • The consequences of making a mistake can be significant
       and costly.

Best practice: Develop a relationship with your municipal
attorney. If you are unsure of how to proceed, contact your
municipal attorney before you act.




Legal Liability – Some Good News

A delinquent tax collector is not liable for the
consequences of an illegality, mistake or overcharge in a
tax bill committed to him for collection.
                                          32 V.S.A. § 4642

You are not responsible for the mistakes of the listers,
treasurer or selectboard.




                                                                11
Legal Liability – Some Good News
Because the delinquent tax collector is an elected or
appointed municipal official, any action brought against
the collector must instead be brought against the
municipality.

The municipality must assume all reasonable legal fees
incurred by the tax collector, so long as the tax collector
was acting in the performance of her duties and did not
act with malicious intent.
                                           24 V.S.A. § 901




                  Questions




                                                              12
                Section 2:
Review of the Municipal Property Tax System
• Who is responsible for paying the property tax?
• The legal relationships created when taxes
    become delinquent.
•   When do taxes become delinquent?
•   Grace periods and graduated penalties.
•   The importance of the warrant.
•   Interest on delinquent taxes.




    The Property Tax Process
The tax collection process starts when the selectboard
prepares and delivers the tax bills to the treasurer or
collector of taxes.

The tax bill must include the amounts for state, county,
town, town school district and highway taxes. It must
specify the amounts imposed on a homestead for
municipal and education property taxes.
                                        24 V.S.A. § 1521




                                                           13
Who Pays Property Taxes?
“Taxable real estate shall be set in the [grand] list to the last
owner or possessor thereof on April 1 in each year in the
town, village, school and fire district where it is situated.”
                                              32 V.S.A. § 3651

The owner and possessor could differ, for example, if a
mortgage holder takes possession of the property, the owner
dies and the property is held by the estate, the property is
held in trust, the property is subject to a life estate or subject
to a lease.




Who Pays Property Taxes?

The owner or possessor of the property on April 1st
remains liable for the years taxes regardless of any
subsequent transfers.
                  Fulton v. Aldrich 76 Vt. 310 (1904)




                                                                     14
Who Pays Property Taxes?
“Commencing with the date of the filing by the listers of the
grand list in the office of the town clerk of the town, taxes
lawfully assessed upon real estate shall be a first lien
thereon….”
                                            32 V.S.A. § 5061

The latest date the grand list can be filed with the town
clerk is July 25 (pop. < 5,000) or August 14 (pop. > 5,000).
                                   32 V.S.A. §§ 4151(a), 4341




Who Pays Property Taxes?
         IMPORTANT LEGAL CONCEPT

Unpaid property taxes are both a personal
obligation of the record owner on April 1st (a debt)
and an encumbrance on the title to the property (a
lien).




                                                                15
Who Pays Property Taxes?

The debt follows the person who owned or
possessed the property on April 1st.

That person may be obligated to pay the debt,
regardless of whether they presently own or
possess the property.




Who Pays Property Taxes?

The lien follows the property.

The present property owner holds the property
subject to the lien, regardless of whether he owned
or possessed the property on the date the grand list
was lodged with the town clerk.




                                                       16
  Who Pays Property Taxes?

  Because the debt and the lien may diverge, there
  can be several new collection opportunities when
  property changes hands.




When are Property Taxes Delinquent?
  Taxes become delinquent when a taxpayer fails to
  pay the taxes on the final due date specified on the
  tax bill.

  This date must be at least 30 days after the tax bill
  has been mailed.
                             32 V.S.A. §§4772, 4792




                                                          17
When are Property Taxes Delinquent?


  The tax due date may be set by the voters.
                                   32 V.S.A. § 4773

  This has been done in most municipalities.




When are Property Taxes Delinquent?

  If a tax due date is set by the voters, then the tax bills must
  be mailed at least 30 days before that tax due date.
                               32 V.S.A. §§ 4772, 4792, 4773

  If a due date is not set by the voters, or tax bills are not
  mailed on time, taxes are due 30 days from the date the
  tax bill is mailed.
                                       32 V.S.A. § 4772, 4792




                                                                    18
When are Property Taxes Delinquent?
  Towns can vote to collect property taxes in
  installments.
                              32 V.S.A. § 4871

  If a town collects taxes in installments, it may vote
  to charge interest on the late installments.
                                     32 V.S.A. § 4873




When are Property Taxes Delinquent?

  However, if a town votes to collect property taxes
  in installments, taxes do not become delinquent
  until the due date for the final installment has
  passed.
                                  32 V.S.A. § 4873




                                                          19
When are Property Taxes Delinquent?
  A municipality can vote to set the date, time
  and method of delivery (e.g., postmark or
  delivery in hand).
                         32 V.S.A. § 4773(a)

  If the town does not vote the method of
  delivery, it must accept payment of a tax
  delivered or postmarked before midnight on
  the due date.
                         32 V.S.A. § 4773(b)




  Water and Sewer Delinquencies


  Delinquent water and sewer charges create
  liens against the property and can be
  collected in the same manner as delinquent
  property taxes.
         32 V.S.A. §§ 3504, 3612, 3306, 3408




                                                  20
Penalties and Grace Periods
The default fee charged by the collector of delinquent
taxes is 8%, but as of April 1, 2005 a municipality may
vote to reduce or eliminate the fee.
                                     32 V.S.A. § 1674(3)(b)


A municipality may also vote to establish a grace period
or graduated fee schedule.
                                  32 V.S.A. § 1674(3)(b)




                The Warrant
Within 15 days after the tax due date (or a shorter time if
the municipality has so voted) the treasurer must issue a
warrant and a copy of the tax bill to the collector against
the delinquent taxpayers in the amount that remains
unpaid.
                                         32 V.S.A. § 4793

This warrant from the treasurer give the delinquent tax
collector legal authority to act. Make sure that you
receive a warrant from the treasurer.

You will be required to file a copy of it in the town clerks’
office prior to tax sale. If you are also the treasurer, issue a
warrant to yourself!




                                                                   21
               The Warrant
The treasurer (or collector of current taxes) must accept,
on behalf of the delinquent tax collector, full payment of
overdue taxes after the tax due date, but before the
warrant is issued. This payment must include the fee and
any interest due.

The taxes, interest and fee collected by the treasurer (or
collector of current taxes) must be paid over to the
delinquent tax collector when the warrant is issued.
                               32 V.S.A. § 5142(b) and (c)




Interest on Delinquent Taxes
Interest on delinquent taxes is not automatic, but may
only be charged if the municipality has voted to collect
interest on overdue taxes.
                                    32 V.S.A. § 5136


Tip: Check to see if the town ever voted to charge interest
on overdue taxes. Get a copy of the minutes of the town
meeting at which the vote occurred, just in case you are
ever challenged on this.




                                                              22
Interest on Delinquent Taxes
Interest charged by the municipality may not
exceed one percent per month for the first three
months and one and a half percent per month
thereafter.

Interest should be imposed on a fraction of a month
as if it were a whole month. If the taxpayer is one
day late, they incur a whole month’s interest.
                                32 V.S.A. § 5136(a)




Interest on Delinquent Taxes
 End of Year 1: 8% + 16.5% = 24.5%

 End of Year 2: 24.5% + 18% = 42.5%

 End of Year 3: 42.5% + 18% = 60.5%

 End of Year 4: 60.5% + 18% = 78.5%

 End of Year 5: 96.5% + 18% = 96.5%




                                                      23
                 Questions




                     Section 3:
Developing a Collection Philosophy and a Collection
                      Policy
 • Eternal truths of property tax collection.
 • What is your collection philosophy?
 • A collection philosophy for you to consider.
 • Why you need a collection policy.
 • The six elements every collection policy should
   address.
 • Recommendations for your policy.




                                                      24
Developing a Collection Philosophy

      Eternal Property Tax Collection Truth
                      No. 1

    Each delinquent tax collector has the same
  fundamental responsibility: Collect delinquent
     property taxes owed to the municipality.




Developing a Collection Philosophy

    Eternal Property Tax Collection Truth No. 2

  Each delinquent tax collector is given the same
       tools to accomplish this responsibility.




                                                    25
Developing a Collection Philosophy
     Eternal Property Tax Collection Truth No. 3

   No two Vermont municipalities are the same.

  Each municipality has different expectations for
            its delinquent tax collector.




Developing a Collection Philosophy

     Eternal Property Tax Collection Truth No. 4

    No two delinquent tax collectors are alike.




                                                     26
Developing a Collection Philosophy


       What is your collection
          philosophy?




The Grim
Reaper
                          Take No
                         Prisoners!




                                      27
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                 Mr. Rogers
                                                                                                                                                                                                                                    Make No
                                                                                                                                                                                                                                    Enemies.
                                                                                                                                                                                                                                    Mr. Rogers




                            Developing a Collection Philosophy
                      Grim Reaper Philosophies:

                      • “Collect the money, no matter what.”
                      • “I’ve heard all the excuses.”
                      • “I don’t get paid to be your friend.”




                                                                                                                                                                                                                                                 28
Developing a Collection Philosophy
Mr. Rogers Philosophies:

• “We all have to live in this town.”
• “My job is to help people in tough
  times.”
• “I feel your pain.”




Developing a Collection Philosophy
        Eternal Property Tax Collection Truth
                        No. 5

      No property owner sets out to fail to pay his
                    property taxes.




                                                      29
Developing a Collection Philosophy
                     What do you really want?




                     You want both:
    Collect the money owed to the town without making
                    enemies for yourself.




Developing a Collection Philosophy

 I believe it is in the best interest of the Town, as well as its residents,
 that property taxes be paid when they are due, but I recognize that
 there are circumstances beyond the control of a taxpayer that may
 cause them to become delinquent. I will work with these
 delinquent taxpayers to help them come current in their obligation
 to the Town and will deal with them in a diplomatic and
 professional manner. However, should I encounter a taxpayer who
 fails or refuses to deal in good faith, I will proceed with any and all
 collection methods appropriate to recover the debt in a timely
 manner.




                                                                               30
               Questions




Developing A Tax Collection Policy
 Vermont law affords delinquent tax collectors
 significant discretion to determine when and how
 delinquent taxes will be collected.

 Whenever a government official exercises
 discretion, there are Constitutional due process
 and equal protection issues at play




                                                    31
Developing A Tax Collection Policy
 Every delinquent tax collector should develop a
 written tax collection policy that explains how
 delinquent taxes will be collected.

 The policy tells taxpayers what to expect and
 reduces the likelihood of allegations that you are
 acting arbitrarily or treating taxpayers differently.




 What Should Be Included in the Policy?

 1.    State the frequency with which taxpayers
       will be given notice of the delinquency.

 “Within 15 days after the warrant for collection of
 delinquent taxes has been issued by the treasurer,
 and each month thereafter until taxes are paid in full,
 a notice will be sent to each delinquent taxpayer
 indicating the amount of taxes, interest and penalties
 owed.”




                                                           32
     What Should Be Included in the Policy?
 Recommendation: Give initial notice to the taxpayer as soon as
 possible, and thereafter send a monthly or quarterly statement to the
 delinquent taxpayer.

      Send the notice in the form of a personalized letter.

      Include a copy of your policy.

      Include in the notice the right of the delinquent to seek
       abatement of the delinquent tax.

      See Appendix G in the Handbook for Collectors of Delinquent
       Taxes for a good model.




     What Should Be Included in the Policy?

2.       State when mortgage and other lien
         holders will be notified of the
         delinquency.

“Mortgage holders and lien holders will be notified of
the delinquency 60 days after the first notice has been
sent to the taxpayer and again prior to tax sale.”




                                                                         33
     What Should Be Included in the Policy?
     Recommendation: There is some disagreement among attorneys
     regarding the propriety of notifying mortgage holders of
     delinquencies before a tax sale is initiated in order to get them to
     pay the delinquency.

       This is a regular practice in many towns. We have yet to
         see a lawsuit initiated on these grounds.

       If you are going to notify mortgage holders of delinquencies
         before tax sale is initiated, make sure it is reflected in your
         policy.

       Be consistent.




     What Should Be Included in the Policy?
3.       Explain how             partial      payments         will     be
         applied.

“Partial payments will be applied proportionally to the
principal amount of the tax, interest and fee.”

“Partial payments will be applied first to the interest portion of
the amount due, and the remainder will be divided
proportionately between the principal amount of the tax, and
the 8 percent fee.”




                                                                             34
   What Should Be Included in the Policy?
Recommendation: Allocate partial payments proportionally to principal,
interest and fee.

    This will result in the taxpayer accruing smaller amounts of
      interest on the declining principal amounts.

    Ensures that the next collector won’t get stuck with an
      account in which there is outstanding principal and interest but
      no fee.

    If the taxpayer is delinquent for more than one year, it is up
      to the taxpayer to determine which year the payment should be
      applied. Don’t assume. Get it in writing.




   What Should Be Included in the Policy?

4. State the conditions under which tax sale or other formal
     collection methods will be utilized.

     “If a payment agreement is not executed by the
     delinquent taxpayer, or if the terms of such a payment
     agreement are breached, the tax collector will initiate
     formal proceedings to collect the debt. Such proceedings
     may include tax sale, legal action to recover the debt,
     distraint of personal property, and/or foreclosure.”




                                                                         35
  What Should Be Included in the Policy?

Recommendation:    Preserve flexibility to initiate
formal collection action on terms you deem
appropriate.

     •   Remember, circumstances may change.
         Having rigid criteria may force you to
         violate your own policy down the road.




  What Should Be Included in the Policy?

5.    Explain what will happen if a tax sale is held and
no one purchases the property.

“If a tax sale is held and the property is not purchased,
or, if in the judgment of the delinquent tax collector,
proceeding with a tax sale is inadvisable, the tax
collector shall collect the delinquent taxes using any
method permitted by law.”




                                                            36
     What Should Be Included in the Policy?

6.       Notify the taxpayer of the right to seek an
         abatement.

“NOTICE: You may be entitled to an abatement of
your delinquent property taxes under 24 V.S.A. § 1535.
If you would like to schedule a meeting with the board
of abatement, please contact the town clerk
at:_________.”




     What Should Be Included in the Policy?

     If you are an elected delinquent tax collector, this
     is your policy. Nevertheless, discuss it with the
     selectboard and treasurer and get their input. You
     have to work with these folks.

     If you are an appointed collector, you should have
     the policy approved by the selectboard.




                                                            37
                   Questions




            Section 4:
Delinquent Tax Collection Methods
 • The concept of debt collection triage.

 • Informal collection techniques – letter writing,
   telephone calls, and the town report.

 • Dealing with abusive delinquents.

 • Tax collection issues: partial payments, payment
   agreements, receipts and records




                                                      38
Debt Collection Triage – Optimizing
 Your Informal Collection Efforts
  tri·age (tr -äzh , tr äzh ) n. A process in which things are
  ranked in terms of importance or priority.

  Informal collection: Methods used to get the delinquent
  taxpayer to pay before formal collection efforts are
  undertaken (e.g., phone calls, letters, payment
  agreements).

  Formal collection: Tax sale, action at law, foreclosure,
  distraint.




Debt Collection Triage – Optimizing
 Your Informal Collection Efforts
   Where will our limited resources give the best results?
                                         Three groups of surgical patients:
                                         Those requiring minimal medical
                                         treatment.
                                         Those requiring moderate
                                         medical treatment.
                                         Those requiring maximum
                                         medical treatment.
Resources are focused on patients requiring moderate treatment. Patients
requiring the maximum attention are left (perhaps to die) so that more can be
saved.     Patients requiring minimum treatment get resources after those
requiring moderate treatment.




                                                                                39
Debt Collection Triage – Optimizing
 Your Informal Collection Efforts
 There are some debts:

      That you will collect with minimal informal collection
       effort (e.g., pay as soon as the first delinquency notice
       arrives).

      That you will never collect, even with maximum
       informal collection effort (e.g., going to tax sale, court, or
       even abatement).

      That you will collect with moderate informal collection
       effort (e.g., pay after a few months or follow through on
       payment agreement).




Debt Collection Triage – Optimizing
 Your Informal Collection Efforts
 Debt collection triage: Identify delinquencies you are
 likely to collect through moderate informal collection
 effort and focus your attention there.


 Informal collection is quicker and cheaper than formal
 collection.




                                                                        40
Debt Collection Triage – Optimizing
 Your Informal Collection Efforts
 What factors do you consider?
   • How much is owed.
   • How much time has passed.
   • How responsive has the debtor been to your
     requests for payment.
   • Willingness to enter into a payment agreement.
   • Previous delinquencies.
   • Value of the collateral.
   • Word on the street.
   • Intangibles.




Debt Collection Triage – Optimizing
 Your Informal Collection Efforts
Remember, delinquencies are earning interest at a
substantial rate.


From the town’s perspective, delay can actually be
beneficial.


But in some cases delay can be detrimental. (e.g, small
collateral, declining property values, abandoned property,
possible bankruptcy).




                                                             41
                      Questions




Informal Collection – Letter Writing
 Before any formal collection effort can be undertaken, written
 notice must be given to the delinquent taxpayer.

 The written notice must allow residents at least 10 days and
 nonresidents at least 20 days (but not more than 40) to pay the
 amount due before the collector will proceed with a tax sale or
 other collection action.

 The notice must specify the time and place of payment, amount
 owed, including taxes, fee and interest.

                                      32 V.S.A. § 4842 4874




                                                                   42
Informal Collection - Letter Writing
     Give this initial written notice to the taxpayer as soon as
     possible (so you wont have to do it later).

      • Send the notice in the form of a personal letter.
           Include a copy of the tax bill and your collection
           policy.

      • Include in the notice the right to request
           abatement.

      •    See Appendix G in the Handbook for Collectors
           of Delinquent Taxes for a good model.




Informal Collection - Letter Writing


 •        Send regular follow up letters to the delinquent
          taxpayer.

 •        Include a monthly or quarterly statement of amounts
          owed.




                                                                   43
Informal Collection - Letter Writing
 In all correspondence to the delinquent taxpayer:

     • Make it personal.   Use the taxpayer’s name, not “Dear
       Delinquent Taxpayer.” You are trying to build a positive
       relationship.

     • Be clear and specific about your expectations. Don’t
       leave any room for misunderstanding.

     • Be diplomatic and professional. No bullying, insults
       or veiled threats.




Informal Collection – Telephone Calls
   Even before you send out the first notice, consider giving
   each delinquent taxpayer a telephone call. Call them
   regularly thereafter.

 • Through your conversations, you will get to know your
   debtors, work with them, and gain their trust.             You
   humanize the collection process.

 • The first goal of the conversation is to get the delinquency
   paid. The next goal is to try and establish a positive rapport.




                                                                     44
Informal Collection – Telephone Calls
•   Explain who you are and why you are calling.

•   Express your concern that they did not pay on time and
    the consequences of being delinquent.

•   Keep a log of your phone calls and record the content of
    the conversations. Don’t rely on your memory.

•   If you feel you can establish a positive rapport, try a
    personal visit.




    Informal Collection – Delinquent
     Taxpayers in the Town Report
•   In some towns, the names of delinquent taxpayers
    are published in the town report.

•   State law requires the town report to include,
    among other things, a detailed statement of the
    financial condition of the town and all outstanding
    payables more than 30 days past due.

•   State law does not require the names of delinquent
    taxpayers to be published in the town report, but
    this information is public record.



                                                               45
    Informal Collection – Delinquent
      Taxpayers in the Town Report
•   Some municipalities take the position that the
    town report is intended to show the financial
    position of the town, not to embarrass the town’s
    delinquent taxpayers.

•   Others believe strongly that listing delinquents by
    name in the town report provides an effective
    incentive for timely payment of taxes.




    Informal Collection – Delinquent
      Taxpayers in the Town Report
      Eternal Property Tax Collection Truth No. 3

    No two Vermont municipalities are the same.
    Each municipality has different expectations for
             its delinquent tax collector.




                                                          46
    Informal Collection – Delinquent
       Taxpayers in the Town Report
•   Suggestion: Try to follow your town’s expectations. If this has
    been the historical practice, then continue doing it unless you
    feel expectations have changed.

•   If you are unsure of the town’s expectations, consider putting it to
    public vote. The voters can vote to require the names be
    published in the town report. 24 V.S.A. § 1683(a).

                        Article XX.
    Shall the town require the names of delinquent
    taxpayers and the amounts owed be published in the
    annual town report?




                      Questions




                                                                           47
    Informal Collection – Dealing with
           Abusive Taxpayers
•    People who cannot pay their bills are usually angry.

•    They are angry at themselves for not being able to meet
     their obligations, but they may project their anger onto
     you.

•    Sometimes you may be able to deflect their anger with a
     positive tone of voice and by being friendly and rational.

•    If you can get them beyond their anger, you may get some
     positive results.




    Informal Collection – Dealing with
           Abusive Taxpayers
•   If you cannot get beyond their anger, do not take their anger
    personally. Do not raise your voice or lose control.

•   Remember that you hold all the cards. Unless there is no value
    in the collateral (i.e., it won’t sell at tax sale) and the delinquent
    taxpayer is judgment proof, you will eventually collect the
    delinquency.

•   There is no reason to subject yourself to abuse or mistreatment.

•   These are the “maximum effort” delinquents that you should not
    waste your time using informal collection efforts on.




                                                                             48
                    Questions




Tax Collection Issues – Accepting Payment
 Anyone can make a payment on a delinquent tax bill, (e.g.,
 mortgagee, lessee, lien holder, relative). You should accept
 payment even if it the payment is being made by someone other
 than the delinquent taxpayer.

 Acceptance of partial payment does not preclude the town from
 collecting the unpaid balance. 32 V.S.A. § 5142.

 You can require that payments be made in cash (not
 recommended), bank check, cashier’s check, or other certified
 funds.




                                                                 49
Tax Collection Issues – Accepting Payment

  You do not have to accept personal checks or postdated
  checks.

  You could allow payment by credit card, if the town has
  made such arrangements.

  If you require payment in a certain form, this should be
  stated in your collection policy.




Tax Collection Issues – Payment Agreements

  Payment plans should be in writing in the form of a
  contract or letter of agreement, signed by the delinquent
  taxpayer.

  Make sure the terms are realistic. Require the outstanding
  balance to be paid off in a year.

  Make clear that in the event of a breach, the collector will
  proceed with tax sale or other collection action.

  This is a legal contract. Have the form reviewed by the
  town attorney.




                                                                 50
Tax Collection Issues - Receipts
  “A collector of taxes…shall receipt for every payment
  made to the collector on account of delinquent taxes.
  Such receipt shall be written in triplicate in a bound
  book or other permanent record and shall indicate the
  date of the payment, the name of the person making the
  payment, the name of the person against whom was
  assessed the tax on which the payment is to be applied,
  the year in which such tax was assessed and if a partial
  payment on an annual tax bill, whether applied on poll,
  personal property or real estate taxes….”
                                       32 V.S.A. § 5137




Tax Collection Issues - Receipts

“…Such collector shall detach and deliver the
original receipt forthwith to the person making the
payment and one copy thereof within 30 days to
the town clerk who shall keep such copy on file….”
                                   32 V.S.A. § 5137




                                                             51
Tax Collection Issues - Receipts
   “…Annually, on or before February 5, the
   collector shall deliver to the auditors of each
   municipality for which the collector is acting all
   such bound volumes in which entries pertaining
   to such municipality have been made during
   the year ending January 31 next preceding, and
   the auditors shall audit the books forthwith and
   after the completion of audit shall return such
   books to such collector.”




 Tax Collection Issues - Reporting
The delinquent tax collector must file a bi-monthly report with the
treasurer indicating the the taxpayers from whom taxes have been
collected, the amounts collected, and the years in which taxes were
due.
                                                  32 V.S.A. § 4646

The collector must also file a certified annual report with the
treasurer and auditors on or before January 15, showing all the
delinquent taxpayers as of December 31st, amounts due and years in
which taxes were due.
                                                    32 V.S.A. § 5162

Failure to make these reports can result in a fine of up to $100.
                                                     32 V.S.A. § 5163




                                                                        52
Tax Collection Issues –Handling the
              Money
 At a minimum, the delinquent tax collector must pay to the town
 all the money collected every two months or when requested by the
 selectboard or other proper officer.
                                                32 V.S.A. § 4646

 Some collectors have establish their own bank special accounts in
 which collected taxes are deposited until transferred to the town
 treasury.

 The better practice is to remit the money immediately to the
 treasurer. You will get your commission sooner and prevent any
 liability for mishandled or lost funds. Foreclose assertion that you
 have misused the town’s tax identification number and/or are
 embezzling town funds.




Tax Collection Issues –Handling the
              Money
 Regardless of how the collector is compensated, he/she
 must be treated as an employee of the town for purposes
 of income tax and FICA (social security) withholding.

 If the collector is compensated by the fee on
 delinquencies, any fee collected must be turned over to
 the town and the town must issue a check back to the
 collector with proper withholding.

 A W-2 must be issued at the end of the year.




                                                                        53
Tax Collection Issues - Reporting
The delinquent tax collector must submit a semi-
annual report to the Director of Property
Valuation and Review (PVR).

The report must include the amount of delinquent
taxes collected in the preceding six months.
                                  32 V.S.A. § 5166




               Questions




                                                     54
                Section 4a
       Formal Tax Collection Methods

• Overview of tax collection methods


• Foreclosure and distraint


• Action at law – the small claims court option




                 Section 5
       Formal Tax Collection Methods
There are four methods available to collect delinquent taxes:
    • Foreclosure
    • Distraint
    • Action at Law (Civil Action)
    • Tax Sale
The methods are not exclusive and can be used cumulatively (but
the debt can only be collected once).

In most instances, tax sale is the most useful and appropriate
method for collection.

Action at law can be useful when the collateral securing the tax
lien has little or no value.




                                                                   55
                   Foreclosure
  Foreclosure is a legal action brought in superior court to allow
  property to be attached and sold to satisfy the debt to the town.
                                                  24 V.S.A. § 5061

  After a hearing, the court issues an order setting out a
  redemption period and directing that the property be sold if it is
  not redeemed by paying the outstanding taxes and costs due the
  town, expenses of the sale, and attorney’s fees.

  If the property is not redeemed, it is sold and the proceeds are
  applied outstanding taxes and costs due the town, expenses of
  the sale, and attorney’s fees. The residue is applied to satisfy the
  junior liens. Any amount left over is paid to the taxpayer.




                     Distraint
After taxes become delinquent, the collector can seize
“the goods, chattles and capital stock in a corporation of a
person whose tax is not paid.”
                                           32 V.S.A. § 5191

If the delinquency is not paid within four days after the
property is seized, the collector can sell the property at
public auction.
                                          32 V.S.A. § 5193




                                                                         56
                Distraint
At least six days before the sale, the collector must post
a notice of the sale in a public place where the
property was taken.

If the property is sold at the auction, title to the
property is passed to the new owner by operation of
law.

After deducting the tax and the collector’s charges, the
balance must be paid over to the delinquent taxpayer.
                                      32 V.S.A. § 5193




                 Distraint
At one time, the law required a tax collector to distrain
personal property before real estate could be sold.

Distraint was probably the most commonly used tax
collection method. Cows were the most commonly
seized property.

Today distraint is hardly ever used, but it is still a
lawful collection method.




                                                             57
                  Questions




   Tax Sale in a Nutshell
Tax sale is the most commonly used method for collecting
delinquent taxes.

In about 40 to 60 days, the delinquent tax collector can sell any
property subject to a tax lien, including primary residence.

If the property is not redeemed within one year after the sale, a
deed is given to the successful purchaser.

If the property is redeemed, the bidder receives the amount of
the purchase price, plus interest.




                                                                    58
       Action at Law
The Small Claims Court Option

Property taxes “and all fees accruing or accrued
against the taxpayer on account of delinquency
may be recovered with costs in an action
brought in the name of the town or municipality
within it to which such taxes are due.”
                               32 V.S.A. § 5222




       Action at Law
The Small Claims Court Option
In most instances, an “action at law” takes the
form of a small claims court action brought
against the delinquent taxpayer.

Small claims court can be useful where the
collateral securing the property tax lien has
little or no value (e.g., a mobile home) and/or
where the amount of the delinquency is so small
that a tax sale is not warranted.




                                                   59
        Action at Law
 The Small Claims Court Option
The maximum jurisdiction of small claims court is $5,000.
You can bring a claim worth more than $5,000 but this is
the maximum amount small claims court can award.
                                       12 V.S.A. § 5531

Procedures are simplified so that participants do not need
a lawyer. You can be represented by a lawyer, if you
choose.

Small claims court is located at the superior courthouse in
each county.




        Action at Law
 The Small Claims Court Option
The filing fee is $35.00 for a claim $500.00 or less
or a fee of $60.00 for a claim over $500.00. If the
collector prevails, the taxpayer will be required to
pay the filing fee.

The collector fills out a complaint that outlines the
basis for the town’s claim: who you are suing, why,
and the amount of the claim.




                                                              60
        Action at Law
 The Small Claims Court Option
The court will mail a summons, copy of the
complaint, and an answer form to the
taxpayer by first class mail.

If the taxpayer does not respond in 30 days,
the court will send this same information to
the collector to have the taxpayer served by
the sheriff or constable.




        Action at Law
 The Small Claims Court Option
If the taxpayer fails to answer after being
personally served, the collector will be
notified of the default by the court.

If the collector files a motion and affidavit for
default judgment within 30 days, the judge
will issue a default judgment.




                                                    61
        Action at Law
 The Small Claims Court Option
The taxpayer can admit that the taxes, interest, fee,
and costs are owed.

If the taxpayer agrees to pay all at once, the court
will issue a judgment of the entire amount.

If the taxpayer offers to make weekly or monthly
payments, the court will probably issue a
judgment stating the installments that must be
paid to the collector.




        Action at Law
 The Small Claims Court Option
The taxpayer can deny the claim. If so, a
trial date will be set.

At the trial, the collector will be required to
prove that the taxpayer owes the delinquent
taxes, interest, fees and costs.

The taxpayer will be allowed to rebut your
evidence.



                                                        62
        Action at Law
 The Small Claims Court Option
The taxpayer can deny the claim. If so, a
trial date will be set.

At the trial, the collector will be required to
prove that the taxpayer owes the delinquent
taxes, interest, fees and costs.

The taxpayer will be allowed to rebut your
evidence.




        Action at Law
 The Small Claims Court Option
When the collector prevails, he will receive a judgment
order against the taxpayer.

Once judgment is obtained, the collector can use the
remedy of trustee process to garnish the taxpayer’s wages
or other income to pay the judgment.

The town can also record a copy of the judgment order in
the land records in any town where the taxpayer owns
real estate. The recorded judgment will become a lien
against any property located in the town.




                                                            63
Questions




            64
                                    Town of _________, Vermont
                              Policy For Collection of Delinquent Taxes



As collector of delinquent taxes for the Town of __________, I believe it is in the best
interest of the Town, as well as its residents, that property taxes be paid when they are due,
but I recognize that there are circumstances beyond the control of a taxpayer that may
cause them to become delinquent. I will work with these delinquent taxpayers to help them
come current in their obligation to the Town and will deal with them in a diplomatic and
professional manner. However, should I encounter a taxpayer who fails or refuses to deal in
good faith, I will proceed with any and all collection methods appropriate to recover the
debt in a timely manner.

1. An 8% penalty is charged on all delinquent taxes. In addition, interest on delinquent taxes
accrues at the rate of 1% per month for the first three months and 1.5% per month thereafter.

2. Within 15 days after the warrant for collection of delinquent taxes has been issued and each
month thereafter until taxes are paid in full, a notice will be sent to each delinquent taxpayer
indicating the amount of taxes, interest and penalty owed.

3. Partial payments will only be accepted in accordance with a written payment agreement. Said
written payment agreement must be executed by the delinquent taxpayer within 45 of the first
monthly delinquency notice. Partial payments will be applied proportionally to the principal amount
of the tax, interest and penalty.

4. If a payment agreement is not executed by the delinquent taxpayer, mortgage and lien holders will
be notified of the delinquency 60 days after the first delinquency notice has been sent to the
delinquent taxpayer.

5. If a payment agreement is not executed by the delinquent taxpayer, or if the terms of such a
payment agreement are breached, the tax collector will initiate formal proceedings to collect the
outstanding taxes, interest and penalty. Such proceedings may include tax sale, legal action to
recover the debt, distraint of personal property, and/or foreclosure.

6. If a tax sale is held and the property is not purchased, or, if in the judgment of the delinquent tax
collector, proceeding with a tax sale is inadvisable, the tax collector shall collect the delinquent taxes
using any method permitted by law.

NOTICE: You may be entitled to an abatement of your delinquent property taxes under 24
V.S.A. § 1535. If you would like to schedule a meeting with the board of abatement, please
contact the town clerk at:_________.


                                                                 _____________________
                                                                 Collector of Delinquent Taxes
                                                                 Town of _________, Vermont
Instructions for Preparing a
Notice of Nonjudicial Sale of Property and
Application for Consent to Sale

Where to Submit Your Notice or                                  sold or, from the recorded Federal tax lien, you
Application                                                     may provide the following information:

                                                                        a. The name of the IRS Area (District)
IRS, Attn: Technical Services Advisory Group Manager
                                                                           office or the place where the notice
                                                                           was prepared and signed;
(Address your application or notice to the IRS office in
which the lien was filed. Use Publication 4235, Technical
                                                                        b. The name and address of the taxpayer;
Services Advisory Group Addresses, to determine where to                   and
mail your request.)                                                     c. The date and place where the notice of
                                                                           lien was filed.
General Information                                             3. A detailed description, including the location of
                                                                   the property affected by the tax lien. For real
Section 7425(c) of the Internal Revenue Code states                property, give the complete physical address;
that before property described in Section 7425(b) is               the legal description contained in the title or
sold, a Notice of Nonjudicial Sale must be submitted               deed of the property and, if available, a copy of
to, or consent to sell the property free and clear of the          the abstract of title;
United States liens or title must be obtained from the
Secretary (delegated authority to) Technical Services           4. If applicable, the reasons the property is liable
Advisory Group Manager for the area in which the                   to perish or become greatly reduced in value if
Notice of Federal Tax Lien was filed.                              kept a minimum of 25 days, or reasons it
                                                                   cannot be kept for that period of time without
When and How To Submit a Notice of Sale                            incurring great expense;

A Notice of Sale shall be submitted in writing by               5. The date, time, place and terms of the sale of
registered or certified mail or by personal service not            the property or the date the taxpayer’s interest
less than 25 days prior to such sale, or date of                   in the property is terminated; and
termination of the contract for deed. The 25 day period
                                                                6. The approximate amount of principal obligation,
commences upon receipt of an adequate notice of
                                                                   including interest, due the person selling the
nonjudicial sale.
                                                                   property and a complete description of any
                                                                   expenses. This may include legal expenses,
NOTE: Although notice of sale must be given prior to
                                                                   selling costs, maintenance fees and expenses,
the sale, the 25 day period does not apply to sales
                                                                   which will be charged against the sale
described in item 4 below, in which case any proceeds,
                                                                   proceeds. NOTE: not all expenses will be
exclusive of costs, shall be held as a fund subject to
                                                                   reimbursable.
United States liens and claims on the property sold, for
not less than 30 days after the date of sale. Notices       Only the original of a Notice of Sale is required. If a
received which are deemed to be inadequate will be          duplicate and a written request for acknowledgement
returned via Letter 1840, Notice of Inadequacy, for         are submitted with the original application, the
necessary action.                                           Technical Services Advisory Group Manager will
                                                            indicate the date and time received on the duplicate
Notice of Sale                                              and return it to the originator.

A Notice of sale will be considered as adequate if it       Consent to Sale
contains the following information:
                                                            Regardless of the foreclosing instructions as to the
     1. The name and address and telephone number           adequacy and timeliness of the sale, a nonjudicial sale
        of the person submitting the notice;                of property shall divest the property of the United States
                                                            liens or title, if the Collection Technical Services
     2. A copy of each Form 668(Y)(c), Notice of            Advisory Group Manager for the IRS office where the
        Federal Tax Lien, affecting the property to be      sale is to take place consents to the sale of the

                                                                                                                (over)
property free of the liens. Consent may be given when         Internet Sales
adequate protection is assured the liens or title to the
property. Protection is considered adequate if:               A Notice of Sale should be given to the Technical
                                                              Services Advisory Group Manager in the IRS office
    1. The taxpayer has no equity in the property, or         where the property is located, when the sale is
                                                              conducted over the Internet.
    2. The taxpayer’s interest in the property is
       assigned to the Technical Services Advisory            NOTE: All other provisions referred to in this publication
       Group Manager, or                                            apply.

    3. The proceeds in excess of prior encumbrances
       are assigned to the Technical Services
       Advisory Group Manager, or

    4. The sale divests the taxpayer of all rights, title
       and interest in the property, and the proceeds
       are to be held as a fund subject to the United
       States liens and claims in the same manner
       and priority as the liens and claims were held
       on the discharged property, or

    5. There are other known circumstances which
       are acceptable to the Technical Services
       Advisory Group Manager.

Application for Consent

Any individual desiring the Technical Services Advisory
Group Manager’s consent to sell property free and
clear of a Federal Tax Lien, or a title derived from the
enforcement of that lien must submit an application in
triplicate. The application must be clear, concise and
address all requirements. The application must contain
the following:

    1. The same information that is listed as a
       requirement for the Notice of Sale;

    2. The basis for requesting the consent;

    3. A statement indicating that adequate protection
       is given to the United States lien or title; and

    4. You must make the following declaration over
       your signature and title. “Under the penalties of
       perjury, I declare that I have examined this
       application (including any accompanying
        schedules, exhibits, affidavits, and statements)
        and to the best of my knowledge and belief it is
        true, correct, and complete.”



           Department of Treasury                           www.irs.gov                   Publication 786 (Rev. 1-2006)
           Internal Revenue Service                                                       Catalog Number 46757E
                   CHAPTER 9. COLLECTOR OF DELINQUENT TAXES

                                        Roles and Responsibilities

The collector of delinquent taxes plays a vital role in ensuring that property taxes owed to the town
are paid by all taxpayers. It is the job of the collector of delinquent taxes to notify taxpayers when
their taxes are overdue, to make arrangements for late payments, or to take formal collection
actions, including conducting tax sales of the property when necessary. Finally, it is the obligation
of the collector of delinquent taxes to keep records of all delinquent accounts, and to provide an
accounting of these records to the locally elected auditors for inclusion in the annual report of the
town.

   The municipality may vote to elect a collector of delinquent taxes for a one-year term (17 V.S.A.
    § 2646(9)), or vote to have its town manager collect its delinquent taxes (24 V.S.A. § 1236(10)). If
    the town does not indicate how it wishes to have its taxes collected, the first constable automatically
    becomes the collector of current and delinquent taxes. 24 V.S.A. § 1529. If the town has indicated
    that it wants its taxes collected by a tax collector but fails to elect one, or if there is a vacancy in the
    office, the selectboard may appoint or hire a collector of delinquent taxes. 32 V.S.A. §§ 4674, 4799.

   A collector of delinquent taxes may not also be an auditor or a member of the selectboard or school
    board. Neither shall the spouse of or any person assisting the collector of delinquent taxes serve as an
    auditor. 17 V.S.A. § 2647.

   Most collectors of delinquent taxes in Vermont get paid by keeping the eight-percent fee that is
    collected on delinquent accounts. Note that collection of the eight-percent penalty is not mandatory,
    but is at the discretion of the collector of delinquent taxes. 32 V.S.A. § 1674(2). The selectboard and
    collector may agree upon a salary, or the voters can vote to pay the collector a particular salary in lieu
    of fees. 24 V.S.A. § 1530.

   The collector must contact delinquent taxpayers to arrange for the payment of delinquent taxes plus
    penalties and interest. The collector should try to work out a payment schedule. He or she must keep
    accounts of every delinquent taxpayer, and the amounts of principal, interest and penalties owed, and
    payments made. Included with each notice of delinquent taxes sent to an owner of a homestead in
    town must be a notice, provided by the state tax commissioner, which describes the homestead
    property tax adjustment. 32 V.S.A. § 6065. At least every two months, and whenever demanded in
    writing by the selectboard, the collector must pay all collected taxes into the municipal treasury.
    Payments must be accompanied by a list of the taxpayers who paid, showing the amounts collected
    and the years in which the taxes were due. 32 V.S.A. § 4646. The collector must also direct the
    application of the payments received by indicating which accounts should be credited and by
    indicating how a particular payment must be allocated (principal/interest/penalty). 32 V.S.A. § 4647.

   After the collector of delinquent taxes pays the taxes to the treasurer, the treasurer then issues a
    paycheck to the collector of delinquent taxes of the penalties collected, minus payments for FICA and
    income tax withholding.

                          COLLECTOR OF DELINQUENT TAXES (continued)


   When necessary for the collection of taxes, the collector of delinquent taxes must conduct tax sales of
    property, bring an action at law, or use other methods for collecting delinquent taxes for the town.
   When the collector of delinquent taxes resigns or the term expires, he or she must immediately lodge
    with the treasurer the tax bill committed to him or her which remains uncollected (in whole or in part)
    along with any money collected. 32 V.S.A. § 4671.

   The state commissioner of taxes may contract with a local tax collector to collect delinquent property
    taxes assessed on homesteads. 32 V.S.A. § 3109a.

NOTE: Legislation which may affect school property tax issues is pending in the legislature
as of this writing (March 1999). If passed, it may create changes in the law regarding
collection of taxes.
   For more information about the duties and functions of the collector of delinquent taxes, please consult VLCT’s
    Handbook for Collectors of Delinquent Taxes. To order a copy of this handbook, please call 800-649–7915.
          Please follow this link to view the entire Handbook For Collectors of Delinquent Taxes

http://resources.vlct.org/results/?s=Delinquent+Tax&c=8&cname=Handbooks+and+Surveys&go=search+within
                                            +this+category+%C2%BB