January 13, 2006

Phila. offers a tax deal to delinquents

It will waive interest and penalties for 20,000 moderate-income homeowners who have fallen into arrears.

By Larry Eichel
Inquirer Staff Writer

City officials yesterday launched an effort to publicize a limited-time offer: Pay your delinquent real estate taxes now and have the interest and penalties forgiven.

The offer, formally known as Conditional Forgiveness, is good only until May 1, is limited to Philadelphians who own and occupy their homes, and applies only to people making up to 250 percent of the federal poverty level.

For families of four, the income cutoff is $48,375; for smaller families, the cutoff is less.

"This is not a tax-amnesty program," Mayor Street said at an afternoon news conference. "But we are a kind and compassionate city... . We wish to be fair with people."

In explaining the program, City Solicitor Romulo L. Diaz said that notices would be sent out today to the roughly 20,000 families thought to qualify. Those who sign up before the May 1 deadline will be given as long as four years to pay their back taxes, perhaps longer in a few special cases.

These 20,000 families, officials said, currently owe the city just under $100 million, including interest and penalties. If all of them were to take advantage of the program, the city would collect $62 million, all of which would be new revenue.

And the average delinquent property-tax bill, which now stands at nearly $5,000, could be paid off for just over $3,000.

Diaz said the program struck a balance between the city's obligation to collect its taxes and a show of compassion for the less fortunate. "We intend to be firm but fair," he said. "We are willing to work with taxpayers who are willing to work with us."

Street actually announced this collection effort on Nov. 13 in one of his Saturday morning radio addresses. The program formally began Dec. 1, and several hundred homeowners already have signed up.

So why did the city wait until now to come forward with such key details as the income guidelines that determine who's eligible and who isn't?

Diaz said that officials decided to wait until after the holiday season lest word of the program be ignored.

Philadelphians who receive the notice in the mail in the coming days - and others who believe they might qualify for the program - are urged to contact Linebarger Goggan Blair & Sampson L.L.C., a Texas-based law firm the city has contracted to help collect taxes.

The telephone number at Linebarger is 215-790-1117.

The new forgiveness policy was developed in conjunction with Community Legal Services and the Philadelphia Unemployment Project. Those groups had expressed concern last year over what they considered to be Linebarger's overly aggressive tactics in trying to collect delinquent taxes.