Is Tax Overages Legit or a Scam? What's Real and What Isn't

"Is tax overages a scam?" is one of the most common questions people ask before they start. The short answer: the money is real and recovering it can be a legitimate business, but a lot of what is sold about tax overages is misleading. This guide separates the parts that hold up from the parts that don't.

What is real

• The money exists. When a county sells a property at a tax sale for more than the taxes owed, the extra money (called surplus funds, excess funds, or excess proceeds depending on the state) is held for the former owner. Counties publish lists of it.
• Much of it goes unclaimed. Notices go to the old address on the tax roll. Owners who moved, or died, often never learn the money is there.
• Helping owners claim it can be legal. Many states allow a recovery agent or an attorney to charge a capped fee, or allow buying the claim under strict rules.

If you want the full picture of how the business works, start with how to start a tax overages business.

What is not real (or not true everywhere)

"You can charge 30-50% anywhere"

There is no national fee. Fees are set by state law, and the rules are very different. In Texas, a non-attorney may not charge a fee to recover excess proceeds at all, and an attorney is capped at the lesser of 25% or $1,000. California caps the fee at the greater of $2,500 or 5%. Colorado caps it at 20% and Arizona at 30%. Any course that teaches one percentage for every state is teaching you to break the law somewhere. See tax overages rules by state.

"Make six figures in your first year"

Results depend on your state, your county, the size of the overages, how many owners you can reach, and how long claims take to pay (often months). Any specific income promise is a sales tactic, not a fact about the business.

"The lists are secret"

They are not. Counties publish surplus lists publicly, or release them through a records request. What a paid source sells you is time — collecting, cleaning, and tracking lists across counties — not access to hidden information. Our surplus funds list guide shows where every state publishes.

"The owner can't get the money without you"

False, and saying it to an owner can get you in trouble. The owner can always claim directly from the county, for free. Many states require your agreement to say so in writing.

"No competition"

Big balances in popular counties attract many recovery agents, and some owners get several letters in a week. The opportunity tends to be in work others skip: smaller counties, older claims close to their deadline, and owners who died and left heirs who are hard to find.

Red flags in a tax overages course or program

• A single fee percentage for "every state."
• Income claims without any disclaimer or evidence.
• No mention of state licensing, registration, or attorney rules.
• Scripts that pressure owners or imply they will lose the money without you.
• Contract templates that leave out the "you can claim this yourself for free" disclosure.
• Advice to cold-call owners in states that restrict phone solicitation for these deals.
• A high upfront price for "secret" lists that counties post for free.

What a legitimate operation looks like

• It works in specific states and knows each one's fee cap and waiting periods.
• It uses written agreements reviewed by an attorney in that state.
• It tells owners plainly that they can file on their own.
• It confirms each balance with the county before reaching out, because lists go stale.
• It tracks claim deadlines and works expiring claims first.

If you are an owner who got a letter

If someone contacted you about surplus funds from a tax sale, the money may well be real. You can verify it yourself by calling the county clerk, tax collector, or tax commissioner where the property was, and you can file the claim yourself at no cost. Our excess proceeds claim guide explains how.

Frequently asked questions

Is tax overages a scam?

The underlying money is real: counties hold surplus from tax sales for former owners. Recovering it can be a legitimate business where state law allows a fee. Many courses and pitches about it overstate earnings and ignore state fee caps, which is where the "scam" reputation comes from.

Is tax overages legal?

Helping owners claim surplus is legal in many states, under that state's rules. Some states cap fees, some require a waiting period or registration, and some bar non-attorneys from charging any fee. Check your state's statute before you start.

Do I need a course to start a tax overages business?

No. The core facts are public: county lists, state statutes, and claim procedures. What you do need is your state's current rules and an attorney-reviewed agreement.

Why do owners get so many letters about surplus funds?

Because the lists are public, many recovery agents work the same large balances. That competition is a reason to focus on smaller counties and harder-to-find owners and heirs.

Work from verified lists

LienSuite is a data tool, not a recovery service. The Excess Proceeds plan ($49.99/month) gives you our surplus catalog with claim deadlines and filing rules, skip tracing (25 lookups a month included), and free heir research. Need just one county? County surplus lists are $27 each.

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Disclaimer: This article is for educational purposes only and is not legal, tax, or investment advice. Surplus amounts are estimates from public county records and may be stale, claimed, or disbursed. Fee caps and licensing rules vary by state and change over time; confirm them with an attorney licensed in your state. LienSuite is an independent software product and is not affiliated with, endorsed by, sponsored by, or associated with any third-party coach, author, podcast, course, community, or organization.