WARNING-Do It Yourself?
In the many years we have been involved in the Property Tax Reduction business we have seen many things. Our attendance at Assessment Appeals Hearings, either with Hearing Officers or the full Assessment Appeals Board requires that, while waiting our turn to have a Clients case heard, we have many opportunities to watch individuals, property managers, lawyers and even other agents present their cases. It is always interesting to watch as the property owners or their representatives fall victim to the arbitrary procedural rules and customs in each County.
As a point of fact, each County Assessor is responsible before the State Board of Equalization to comply with The Revenue and Taxation Code. To this end they are audited and must adhere to certain of the findings to receive their full share of the tax revenue. But there is plenty of room for differences.
Below you will find excerpts from an article on the internet at Cal-Tax.org, an organization founded in 1926 “to protect taxpayers from unnecessary taxes and to promote government efficiency.” It is especially important for those who listen to the Assessor’s Office rhetoric of not needing to hire an Agent because they will do the right thing now that they admit property values are declining to read this in it’s entirety. The article is a bit dated but much of what follows still rings true for those who think the government is fair and objective. To view the entire article, click here.
Why taxpayers hate the property tax system
By Eric Miethke
Most practitioners and property tax managers share a common bond: they feel that rather than being a system of adjudicating legitimate disputes, the property tax appeals process has become a system of rubber-stamping assessor values, even when those values are arbitrarily determined.
How could practitioners and property tax managers come to this conclusion? Simply stated, because it is the correct one. The property tax appeals system is inherently unfair, and is designed to provide maximum revenue collection and de minimus due process for taxpayers.
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Third, once an application for reduction in assessment is filed, the counties have taken the position that no amendments to that application can be made. Considering that at the time applications are due, tax bills have not even been sent out, it seems pointless to preclude taxpayers from amending their applications; that is, of course, unless it is to ensure that many people do not receive a fair hearing on their applications.
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If one recognizes that most taxpayers don’t understand the distinction between an application to reduce base-year value and a reduction in fair market value under Proposition 8, the prohibition on amending applications seems both punitive and inconsistent with due process. By contrast, administrative proceedings in the sales and income tax areas allow such petitions to be amended or augmented up to the hearing.
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Next, once the county has received an application, the law provides that it can wait up to two years before granting an appeals board hearing. State tax agencies, under direction from the Legislature, are moving to shorten and accelerate the administrative appeals process. With modest exceptions, the counties have gone in the other direction with the property tax. During the 1990s, counties have repeatedly sought to extend the two-year limitation on property tax appeals hearings to three years.
As the old saying goes, “Justice delayed is an opportunity for the taxpayer to give up.”
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When a hearing is finally scheduled, the taxpayer is often surprised to find that the same “law firm” (county counsel) that is advising the assessor is also advising the supposedly impartial assessment appeals board. Especially in small counties, this could be a one- or two-person office where lawyer contact is inevitable. If not an outright conflict of interest, such a system certainly has the appearance of impropriety and weakens the confidence of taxpayers that they are, in fact, getting a fair hearing.
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Most of the Property Tax Rules and Assessor Handbooks, which provide the backbone of California’s property tax appeals system, have not been substantially revised in over 20 years. Some are so obsolete that they are simply not used, while others reflect assessment practices based on a regulatory and business environment that has not existed for over a decade. The continued use of these documents has confounded taxpayers and has directly benefitted assessors who are able to avoid an objective body of authority to challenge their subjective assessments.
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But maybe updated materials are unnecessary, given that “local rules” may virtually preclude anything but the property tax equivalent of a “show trial.” The state Constitution allows counties to adopt local procedural rules for assessment appeals (it is controversial where the dividing line is between a “procedural” and “substantive” rule). This also has been abused at the expense of taxpayers’ rights. Riverside County’s infamous “Rule 10″ allows the county to completely dismiss any application where the taxpayer does not supply all information requested by the assessor, even where the assessor bears the burden of proof in the appeal. Given that the assessor may not even provide the rationale for an assessment to the taxpayer for years to come, this “procedural” rule seems a convenient way to limit appeals. To its credit, the State Board of Equalization has sued Riverside County over this rule.
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Los Angeles County had a different approach. When the county’s legislative efforts to extend the two-year statute of limitations for property tax appeal hearings to three years were rejected by the Legislature, the county responded by passing a local rule limiting property tax appeals to 30 minutes, unless the taxpayer were willing to sign a waiver of the two-year statute of limitations, whereupon the time limit on the taxpayer’s hearing was removed. In other words, because the Legislature refused to limit taxpayers’ rights in one way, Los Angeles County found a better way to accomplish it locally.
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And what of that fair and impartial fact-finding body, the Assessment Appeals Board (AAB)? At the very least, taxpayers may find themselves before a panel of three individuals who know little, if anything, about California property tax law, procedure or valuation….Worse, in smaller counties, the AAB may actually be the same county Board of Supervisors that is relying on disputed property taxes to balance its budget…Next, AABs have discovered that they can save themselves a lot of time and money by asking taxpayers to prepare proposed findings of fact. Taxpayers end up paying an attorney or agent substantial sums of money to draft proposed findings.
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This system of justice is not in a Third World dictatorship, but in California, a state that proudly touts its taxpayer-friendly, pro-business environment. That any taxpayer could ever prevail under this system is the best objective proof we have of the existence of a Supreme Being.
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Incredibly, the response of the assessors and the counties has been to sponsor legislation to stack the deck even further against taxpayers…Assessors need to understand that their effort to pass AB 1027, using taxpayer dollars to deprive taxpayers of their rights, infuriated taxpayers and confounded legislators. Maybe it is not so amazing that assessors cannot understand why taxpayers feel so cheated by the property tax system.
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The property tax appeals system, as well as the overall system of property tax administration, is sick. Its illness stems from years of systematic neglect by the counties, the State Board of Equalization and the Legislature. Far from benign neglect, however, the descent of the property tax appeal system into obsolescence has benefitted counties and assessors disproportionately. The unfairness that angry taxpayers feel translates into disrespect for the system.
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But no matter what the political timing, there should be no mystery whatsoever on the part of the assessors and the counties as to why the property tax system has engendered such ill will amongst California’s taxpayers.
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The above excerpts can be read in their entirety at Cal-Tax website. We at CAPTA strongly suggest you read all of Mr. Miethke’s article before you make a decision to represent yourself. While there are some fine, fair, professional people we enjoy working with at many of the County Assessor’s Offices throughout California there are also many who contribute to the frustration expressed in the article above.
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