PRACTICE CORNER FROM THE
Best Practices for Federal Tax Lien Marketing in 2020
What if the IRS actually published a list of all the names and addresses of the 13.2 million individuals and businesses that have been identified by the IRS that owe back taxes? For those of us who offer IRS representation services, we’d all be millionaires! It would be the “mother” of all lists, as we would have a built-in lead generation source. Unfortunately, the IRS doesn’t publish such a list. However, the next best thing does exist! It’s called the Notice of Federal Tax Lien list. National Federal Tax Lien (NFTL) Facts The IRS issues a notice of National Federal Tax Lien (NFTL) when the taxpayer has ignored all previous attempts by the IRS to collect the debt. The lien puts other creditors on notice that the IRS has first “dibs” on the taxpayer’s property.
How-To for Mailing to the List Taxpayers who have liens filed against them are extremely motivated to take care of the problem. An NFTL can prevent someone from buying a car, buying a home, obtaining a loan of any kind, even gaining or maintaining employment, etc. I recommend mailing to people who have a lien in the amount of at least $10,000. For about $1.02 per name, which includes the cost of the list, a personalized merged letter, #10 windowless envelope, and first-class postage, you can embark on a marketing campaign to people who have federal notices of tax liens filed against them. For best results, mail to 1,000 names a minimum of three times over a 90-day period. If you do that, you can expect a .5% to 2% response rate. Since this group is highly motivated to resolve the issue, you should be able to close at least 50% of the callers, netting you 2–10 new clients from this campaign. The campaign will cost you $2,560 (3,000 times $1.02 minus $500, as you only have to pay for the list once.) The minimum average case size is $5,000. Therefore, this campaign should generate $10,000 to $50,000. That would equate to a 3.9-to-1 to 19.5-to-1 return on investment, which is money well spent.
When the IRS issues a NFTL against an individual taxpayer, that information is public record. The IRS files these liens at the over 3,300 county recorder offices throughout the U.S. So, for example, if a business has unpaid 941 payroll taxes and the IRS files a NFTL against that business at the county recorder, it’s also filed with the state’s secretary of state where the business was incorporated. Each county across the U. S. is different: Some will publish the info daily, others once a month. Some counties publish their NFTL data online, and for others, you’ll have to go to the county recorder’s office for the information. Buying NFTL Lists There are several list brokers and data compilers (data compilers actually own the information they compile) that “sell” this information, including the taxpayer’s name, address, the amount of the lien, and the type of tax owed. You can pick up a “fresh” list of 1,000 names for around $250. In 2018 (the latest period for which IRS stats are public), the IRS issued over 410,220 NFTLs. That’s down from the high of 1,096,376 NFTLs issued in 2010. However, it is highly anticipated that the number is on the rise again.
–Michael Rozbruch
888.670.0303 • 3
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