SCOTTS VALLEY, Calif.--(BUSINESS WIRE)--New York City is far and away the nation’s leading haven for delinquent taxpayers, according to an analysis conducted by TaxLifeboat, a company specializing in assisting taxpayers who are in trouble with the Internal Revenue Service.
A review of IRS tax liens across the country in the 12 months ended September 15 reveals that New York City accounts for nine, or 18 percent, of the top 50 US ZIP Codes with the most liens recorded over the past 12 months. Four of the New York City ZIP Codes encompass some of Manhattan’s affluent neighborhoods, including the Upper West Side (10025 and 10023), Chelsea (10011), and Murray Hill (10016). The remaining five New York City ZIP Codes are in minority and working-class areas of Brooklyn, Queens, and the Bronx.
Manhattan’s tax debtors earn on average 250 percent more than those in the city’s less affluent neighborhoods, according to the latest available census data. The average IRS debt of Manhattan’s wealthier tax debtors is $58,592, about 86 times higher than that owed by working-class New Yorkers.
“The statistics suggest a rather harsh reality,” said Tom Evans, TaxLifeboat’s founder and president and one of the leading authorities on IRS enforcement trends and practices. “Some people in New York apparently choose not to pay their taxes, and some simply don’t have the means to do so.”
Virtually all of the remaining ZIP Codes in the top 50 are located in minority and economically depressed neighborhoods. Six of these neighborhoods are in Las Vegas, four are in Washington, DC, and three are in Detroit.
New York’s top ranking for tax debtors is not an aberration. A TaxLifeboat analysis of nationwide tax liens from July 2009 to July 2010 revealed that New York City accounted for 16, or 32 percent, of the top 50 US ZIP Codes with the most tax liens. Six of those New York ZIP Codes were located in Manhattan. Mr. Evans said that New York’s decreased presence in the top 50 is not necessarily due to New Yorkers developing a sudden surge of civic responsibility, but rather the result of an increasing number of working-class Americans who have been hard hit by the recession and do not have the means to pay their tax debts.
Mr. Evans, who holds an MS degree in systems analysis and decision theory from Stanford and an MBA in finance from USC, said that it is not surprising that economically depressed minority neighborhoods overwhelmingly account for the areas with the most tax liens. A TaxLifeboat study last year found that ZIP Codes with large African-American and Hispanic populations are subjected to IRS enforcement actions at double the rate of the general population. (The study can be found at: http://www.businesswire.com/news/home/20101202006118/en/Blacks-Hispanics-Face-IRS-Enforcement-Actions-Double)
Mr. Evans emphasized that the IRS does not deliberately target minorities; the disproportionate representation is the unintended consequence of the IRS’s increasingly automated, one-size-fits-all enforcement procedures.
TaxLifeboat’s study is based on analysis of the top 50 ZIP Codes with the highest number of IRS tax liens from September 15, 2010 to September 15, 2011 as reported by InfoUSA, as well as data from January to September 2011 as reported by National Court Research.
The latest US Census data available at the ZIP Code level (2000) was used to determine the median income and racial profiles.
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TaxLifeboat has 120+ proven, low-cost solutions to help taxpayers in trouble with the IRS. With TaxLifeboat, clients can quickly determine and implement their best tax strategy. The company is recommended by tax professionals, HR departments, social workers, bankruptcy attorneys, and debt counselors and has an A+ Better Business Bureau rating. The company offers a money-back guarantee for any clients who are not satisfied with its products and services. Tom Evans envisioned an unbiased, professional tax service in 2003 and published his highly acclaimed book and software program, Happy About Tax Relief, in 2007. Since then, Mr. Evans has launched TaxLifeboat, filed five patent applications on tax defense solutions, designed a strategy selection process with 400,000 algorithms, and created thousands of pages of implementation resources for taxpayers. For more information, visit www.TaxLifeboat.com.