Maine Property Tax Bills Piling Up?

Maine Town Property Tax Liens
Life’s Unexpected Turns

Property tax liens can be a major hassle for those who find their financial situation has taken an unexpected turn for the worse. Numerous property owners in Maine are barely making ends meet as property taxes continue to increase. Eventually, a car breaks down, someone gets sick, the roof leaks, the water heater goes or any of a number of emergencies deplete the savings that were supposed to pay that ever-increasing property tax bill.

Rock Bottom

Eventually, the lien letter comes. Then almost as if by magic the calls and letters from out of state agencies promising to settle the debt for pennies on the dollar start. It’s common for people to start wondering if they’ll ever recover. Sometimes to make matters worse it’s easier to not pay the next year when another one of those life emergencies come up. After all, it’s just property taxes and the local town. Being behind on your property tax bill isn’t the same as owing the IRS. What can the town office do anyway?

Wait… What?!? It’s more dangerous to owe the town than the IRS?

Unfortunately, variations of this story and the views on the town are common. Owing a property tax bill often doesn’t seem as bad. The reality is that it’s one of the most dangerous forms of tax debt to your financial wellbeing and your physical safety.

People are often very surprised when I point out that the last person, they want to owe is the town assessor. “Wait what….” they say. After which I point out that local property debts can trigger auto foreclosure provisions on a Maine resident’s home, most towns don’t offer payment plans and usually demand payment in full to stop the foreclosure.

Local Small Towns Seized More Homes Administratively…
Than Most IRS Revenue Officers Last Year

Compared to the IRS and even the MRS auto-foreclosure provisions are positively draconian treatment. The IRS almost never seizes homes and is even less likely to seize a primary residence. For the IRS to seize a person’s home they must first convince the Dept of Justice that the taxpayer’s behavior is so egregious that it’s worth their time to take them to court. The IRS can’t seize a home on its own. It must first get the DOJ involved. For this reason, it is incredibly rare for the IRS to seize homes. Despite many people’s quite reasonable latent distrust for late night T.V. advertisements from the likes of the now discredited and disbarred Roni Deutch; the idea that the IRS is out their taking homes left and right has been drilled into their head through sheer repetition.

Your local tax assessor? They don’t have to lift a finger to seize your home. All they have to do is to seize a home is wait. The auto-foreclosure process will often start after around 18 months.

After learning this the light clicks on. All their previous beliefs about the big bad IRS are replaced with the sudden realization that the most dangerous tax collector is right down the street.

Tax Bills Piling Up?

At which point I usually point out that while not paying your taxes is never a good plan there is a counter-intuitive solution. If you really can’t afford to pay them all; simply make sure you pay your property taxes first.

State, federal, and a few local taxing agencies offer relief programs that assist struggling taxpayers. While it should always be your plan to pay your taxes; sometimes life happens. If you find yourself in this situation you would be well served to consult a tax adviser. Ideally one experienced with these kinds of issues. These types of issues are very specific and nuanced so making sure the advisor regularly deals with them is important.

While most tax advisers won’t and can’t advise you to not pay your taxes, they can help you understand the different repercussions you will face with each agency. Once you have that information you can make an informed decision about your best course of action.

Other Articles You Might Find Helpful
Don’t File An Offer in Compromise 
When to file an Offer in Compromise
Understanding Maine Revenue Service Offers in Compromise
Maine Property Tax Bills Piling Up?
Owe Maine Income Taxes?

 

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