Indiana Tax Court Reverses Property Tax Ruling Based on Assessor’s “Trial by Ambush”

Indiana Tax Court Reverses Property Tax Ruling Based on Assessor’s “Trial by Ambush”

Even in a small claims proceeding, the Indiana Board of Tax Review must “uphold the fundamental tenet of our judicial system that neither party be subjected to a trial by ambush.”  In RJK Trust v. LaPorte County Assessor (Sept. 18, 2015), Taxpayer appealed the $630,500 assessment of a single family residence for the March 1, 2006, assessment date.  Denied relief by the County Board, Taxpayer on appeal to the Indiana Board elected to use the Board’s small claims procedures.  The Indiana Board found that the Assessor had the burden of proof.  The Assessor submitted an appraisal valuing the property at $800,000.  The appraisal, however, had not been produced before the hearing — despite Taxpayer’s written requests seeking copies of the Assessor’s documents pertaining to the appeal.  The Indiana Board accepted the appraised value, ruling to increase the home’s assessment.

Before the Tax Court, Taxpayer objected to the Indiana Board’s reliance on an appraisal that had not been timely produced.  The Tax Court explained that “the Indiana Board’s small claims regulations require, upon request, pre-hearing disclosure” of a party’s documentary evidence.  Slip op. at 5 (citing 52 I.A.C. 3-1-5(d) (emphasis in original).)  Despite this mandate, “a trial by ambush is exactly what happened.”  Slip op. at 5.  Consequently, Taxpayer “had no opportunity to adequately prepare any rebuttal to the evidence in the appraisal report in advance of the hearing or in the twenty minutes it had to present its case.” Id.  The Indiana Board “abused its discretion by making a determination that is clearly contrary to the logic and effect of the facts and the law because it is based on evidence tainted by the evils of unfair surprise.” Id. at 6.  The Court reversed and remanded the Indiana Board’s final determination for a new hearing.

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