New York, NY – Council Speaker Corey Johnson and Council Member Daniel Dromm, Chair of the Finance Committee, urged the city’s Department of Finance (DOF) to postpone this year’s scheduled tax lien sale to help struggling property owners in the midst of the coronavirus pandemic. Currently, the last day to pay or enter into a payment agreement plan in order to avoid the tax lien sale is May 14, 2020.
In a letter sent today to Finance Commissioner Jacques Jiha, Speaker Johnson and Council Member Dromm noted that in the middle of this pandemic, enforcement is not the appropriate action. The city should be working to provide short-term solutions to debtors like other governmental offices, including the Internal Revenue Service, are doing. This is a pause, not a cancellation. We know the city needs this money, but now is not the time to go after people to collect debt. We are in an unprecedented crisis.
“People are struggling, and we as a city government must be doing what we can to help alleviate some of their burdens. As we battle this unprecedented pandemic, we have to make sure we provide assistance to all New Yorkers in need. The city is in a state of pause, and outstanding debt collection should also pause until this crisis passes,” said Council Speaker Corey Johnson.
“The NYC Department of Finance must postpone the tax lien sale in light of the public health emergency. New Yorkers need relief, and postponing the sale would help deliver exactly that. While I recognize the need to collect revenue, the tax lien sale should not be conducted at a time when NYC families are struggling because of lost wages, sick family members and the many other hardships brought on by the COVID-19 crisis. I hope the Department will join the many federal and state agencies that have halted enforcement measures in order to help those who have been negatively impacted by the virus,” said New York City Council Finance Chair Daniel Dromm.
Read a copy of the March 25, 2020, letter below.
Dear Commissioner Jiha:
We are writing to urge the Department of Finance to delay this year’s scheduled tax lien sale until after the immediate emergency of COVID-19 has passed. Now is not the time for enforcement action. The Department of Finance should follow in the myriad of other governmental and collection entities who have provided short-term, immediate relief to debtors. As you know, the 60-day notices were recently sent out and the last day to pay is currently set for May 14, 2020.
Especially in this time of crisis, we recognize that the City is in need of funds to combat the virus itself and to fund programs that will assist small businesses, help people who have lost their jobs, and to fund the recovery efforts that will be needed to revive our economy. Given that recognition, we do not make the recommendation of delaying the tax lien sale lightly.
Should the Department of Finance adopt this recommendation it would not be alone. The federal Internal Revenue Service has stopped some tax enforcement actions, including certain levies and collection notices. The New York State Office of Court Administration halted all new debt-related cases. The United States Department of Education is stopping collection efforts on defaulted student loans until further notice. And, the largest trade group for debt purchases that pursue borrowers for collection, Receivables Management Association International, said it will institute new hardship provisions to temporarily suspend collection activities in cases of significant financial hardship.
Moreover, as your staff frequently notes, the goal of the tax lien sale process is not to sell liens, but rather to collect outstanding debt and to connect with and enroll eligible taxpayers in to exemption programs and payment plans to help them pay down their debt over time. This is necessarily an outreach and in-person intensive process that cannot be fully implemented while the City is urging everyone to stay home to save lives.
In light of these factors, please consider delaying this year’s tax lien sale. We welcome your continued partnership to protect the wellbeing of New York City property owners as we navigate this unprecedented crisis.
Hon. Daniel Dromm
Chair, Finance Committee