When taxes are not paid, a governmental entity that is owed the taxes has a number of tools at its disposal. It can garnishee wages. And it can foreclose on or seize property. Taxpayers also have tools at their disposal such as deed in lieu of foreclosure or payment plans.

A recent article noted that Hennepin County is currently in the process of attempting to gain payment for uncollected taxes owed on real estate property. One of the tools that the county is using is to seize the property to liquidate the tax debt.

According to the county, the number of taxpayers who are behind on their property taxes is very high, although it has declined slightly. The procedure to seize a property begins with a penalty notice. Hennepin County reportedly sent out 16,674 penalty notices this year, compared to 22,251 notices sent out at the same time in 2009.

One of the next steps in the process to collect back taxes is a judgment lien. There were 3,196 judgment liens this April, which is about half as many as in 2008.

So the number of notices and liens are down, but the number of taxpayers who have not been able to pay the back taxes has resulted in a record number of property seizures. That number is up with 255 properties seized last year for failure to pay taxes.

The largest dollar amount owed is for some property in Orono, where some of the property taxes are in dispute. Hennepin County reported that almost $43 million is owed in back taxes and penalties.

The Internal Revenue Service, Minnesota Department of Revenue and Hennepin County each have different ways in which they operate and different methods to resolve taxation disputes.

Losing one’s property to seizure is not an option most people would choose. Experienced and professional legal advice may be able to prevent that result and find another more acceptable outcome.

Source: StarTribune, “Property-tax warnings hit record high in Hennepin County,” Kevin Duchschere and Jane Friedmann, June 17, 2012