Proceed With Caution, Part X (June 2013):  Assessor should “vigorously” defend or settle property tax assessments; burden-shifting update; continuance denied; PTABOA loses authority; limits on exemption appeals; Assessor’s “specious” argument on filing deadline

Proceed With Caution, Part X (June 2013): Assessor should “vigorously” defend or settle property tax assessments; burden-shifting update; continuance denied; PTABOA loses authority; limits on exemption appeals; Assessor’s “specious” argument on filing deadline

Indiana Board admonishes assessor for wasting its time; Owner failed to offer evidence of prior year’s assessment, so burden of proof didn’t shift.  Skish v. Lake County Assessor, Pet. No. 45-004-06-1-5-0001 to -0003 (April 4, 2013) (March 1, 2006 assessment date) [Small Claims docket].  In this appeal of three vacant residential parcels in Gary, no representative of the Assessor’s office attended the administrative hearing.  The Indiana Board was not pleased and reminded the Assessor that, “to the extent that he believes that his assessments were correct, the Assessor should appear at the hearing and vigorously defend the assessments.”  (Page 1, ¶ 6 n.1.)  If the Assessor believes there was an error, he “should have stipulated or settled the matter prior to hearing.” Id.  Not showing up only serves to irritate the Board.  “The Board does not appreciate wasting its resources or those of the [Owner] to hold a hearing where the [Assessor] does not even appear.”  Id.

Ind. Code § 6-1.1-15-17.2 shifts the burden of proof to the assessor where the assessment under appeal has increased by more than 5% over the previous year’s assessment.  But a taxpayer must prove the prior value.  Owner provided neither property record cards nor other evidence showing how the parcels were assessed as of March 1, 2005, the immediately preceding assessment date.  Owner only submitted a final determination by the Indiana Board for the properties’ assessed values as of March 1, 2002.  Lacking evidence of the 2005 assessments, the Board held that Owner had the burden of proof.  (Page 5, ¶ 13.)

The Assessor’s failure to appear and support his valuations likely altered the appeals’ outcomes.  Owner made a “minimal prima facie case” that that the properties were over-assessed for the March 1, 2006 assessment date because:  (a) Owner purchased the parcels at a tax sale in 2001 for a lower value; (b) tax sales were common in the properties’ neighborhood and may have represented the market in that area; (c) the Indiana Board lowered the 2002 assessments to a value near the tax sale purchase prices; (d) the Board gave “some weight” to Owner’s argument that property values in the area did not significantly change between 1999 to 2005 (the relevant time for trending values) because the Assessor originally assessed the properties at the same value for 2002 and 2006; and (e) the only evidence before the Board supported Owner’s requested values.  (Pages 6-8, ¶¶ 14-15.)

Belated, unsupported request for continuance of hearing rejected; objections went to weight of evidence.  Gillette v. Brown County Assessor, Pet. No. 07-006-09-1-5-00002 (April 5, 2013) (March 1, 2009 assessment date) [Small Claims docket].  Owner appealed the assessment of her lakefront rental property.  Shortly after the administrative hearing began, Owner requested a continuance because “she was not prepared to represent herself adequately.”  (Page 2, ¶ 11.)  Owner did not “feel knowledgeable about the industry-specific terms.”  Id.  And she purportedly had made “numerous attempts to contact her attorneys, but got no response.”  Id.    Assessor (represented by counsel) objected, pointing out that she had already incurred expense “based on the people (attorney and witnesses) at the hearing” and that Owner was raising the issue for the first time, even though Assessor’s counsel and Owner had spoken by telephone the evening before the hearing.  (Page 2, ¶ 12.)  Noting that Owner “did not establish a reason that might justify a continuance,” the Board denied the request for a continuance.  (Page 2, ¶ 13.)

Assessor objected that Owner’s appraisal, insurance invoices, letters, and leases related to time periods “too far removed from the valuation date, making them not relevant.”  (Page 3, ¶ 14.)  The exhibits were admitted, as the objection went more to the weight of the evidence than its admissibility.  Id.

Assessor had the burden of proof under Ind. Code § 6-1.1-15-17.2 and admitted that the assessment should be reduced to the prior’s year’s value.  (Page 5, ¶ 18.)  Owner had the burden to prove a lower value.  Id.   She failed to do so.  (Page 5-7, ¶¶ 19-20.)  Her conclusory statements about declining housing prices weren’t probative.  (Page 5, ¶ 19(c).)  And she failed to relate her 1998 and 2006 appraised values to the January 1, 2008 valuation date.  (Page 6, ¶ 19(d).)  Owner also submitted several years of insurance invoices to support a lower value.  These too didn’t support a reduction.  The Board observed:  “While those documents perhaps are some evidence of a minimum market value for the house, nothing . . . in the record explains the basis for those values, how they were determined, or the qualifications of the individuals who made the determinations.”  (Page 6, ¶ 19(e).)  Owner may have used the income approach to value the rental property, but she “offered absolutely no calculations that even begin to resemble the income capitalization approach to valuation.”  (Page 7, ¶ 19(g).)

PTABOA lost jurisdiction to value property once appeal to Indiana Board filedGrabbe v. Clinton County Assessor, Pet. Nos. 12-003-08-1-1-00001 et al., (April 5, 2013) (March 1, 2008 and 2009 assessment dates) [Small Claims docket].  When the local Property Tax Assessment Board of Appeals (PTABOA) failed to hold a timely hearing, Owner filed four Form 131 appeals with the Indiana Board.  Ind. Code § 6-1.1-15-1(o)(1) allows this direct filing.  After these appeals were filed, the PTABOA issued final determinations upholding the parcels’ 2008 assessments.  Those determinations were invalid, because the PTABOA “lost its authority to act on [Owner’s] appeals when he filed his Form 131 petitions with the Board.”  (Page 1, ¶ 1 n.1.)

Indiana Board can’t decide valuation of property in appeal of exemption denial; Board allows exhibits where there was no harm to opposing partyLocal Union No. 871 UAW Building Corp. v. LaGrange County Assessor, Pet. Nos. 44-002-10-2-8-00001 and -00002 (April 12, 2013) (March 1, 2010 assessment date).  Union filed an exemption application for its office and meeting facility, as well as a separate application for its personal property.  Union requested a 100% exemption.  The PTABOA denied the claims, and Union filed Form 132 appeals with the Indiana Board.  Union’s financial secretary testified as to the value of the personal property.  However, because Union “only filed Petitions for Review of Exemption, that [valuation] issue could not be addressed at the current hearing.”  (Page 5, ¶ 15.)

Assessor objected to the admission of all of Union’s exhibits, because he had not received them at least five business days before the hearing, as required by rule of the Board.  “The purpose of this requirement is to allow parties to be informed, avoid surprises, and promote an organized, efficient, fair consideration of cases.”  (Page 4, ¶ 11) (citing 52 IAC 2-7-1).  The Board noted that it could have excluded the exhibits due to Union’s failure to timely exchange them.  (Page 4, ¶ 12.)  But Assessor did have four business days and seven total days (due to a holiday and weekend) to review the materials.  The materials were not extensive and were only one day late, so there was ample time for the Assessor to consider them.  Union hadn’t waited until the day of the hearing; it had attempted to comply with the exchange requirement.  The Board allowed the exhibits.  Id.

Exemption appeal timely when filed within thirty days of receipt of notice of PTABOA’s denial; Board couldn’t overlook failure to timely file applicationRise Up and Walk Christian Ministries, Inc. v. Elkhart County Assessor, Pet. Nos. 20-027-11-2-8-00001 and -0002 (March 1, 2011 assessment date).  Owner sought an exemption for its church and a home adjacent to the church used as a parsonage.  PTABOA denied the exemption on June 13, 2011, and Owner filed its appeals to the Indiana Board on August 25, 2011 – beyond the thirty days period for exemption appeals.  A letter from the Assessor’s deputy explained that Owner did not receive notice of the denial until August 3, 2011.  Therefore, the petitions were considered timely filed.  (Page 2, ¶ 2 n.1.)

The Indiana Board held that the property was 100% exempt for the March 1, 2011 assessment date, because it was owned, occupied and used for religious purposes.  (Page 12, ¶ 34.)  Owner had also requested that the PTABOA “backdate” the exemption to the date of the property’s 2006 purchase.   The property was acquired from another church.  Owner had been told the property would “automatically” be exempt.  Ind. Code § 6-1.1-11-4(d) allows an exemption to be carried forward if an exemption application was filed properly for a religious use as of a prior assessment date and the property continues to be used for an exempt purpose.  If the property changes hands, either the previous or the new owner must notify the assessor of the transfer.  Id.  The Board concluded:  “Thus, when the [Owner] purchased the subject properties, title to the real estate changed and the [Owner] was required to properly apply for the exemption.”  (Page 11, ¶ 32.)  Owner had not filed an exemption application before 2011.  Explaining “there is no authority that would allow the Board to simply ignore the statutory requirements cited in Indiana Code § 6-1.1-11-1 and retroactively apply an exemption to the property or refund taxes paid,” the Board ruled that it could only address the 2011 exemption.  (Page 11, ¶ 33.)

Indiana Board chides Assessor’s “specious” argument on filing deadlineSharygin v. Posey County Assessor, Pet. No. 65-018-11-1-5-00001 (April 15, 2013) (March 1, 2011 assessment date) [Small Claims docket].  Owners appealed the assessment of their improved residential parcel.  Assessor asserted that Owners’ local appeal was untimely, where the date stamp on the Form 130 petition was more than the forty-five day appeals after the date tax bills were mailed.  And Assessor further contended that the appeal to the Indiana Board was likewise untimely based on its date-received stamp.  As to the local appeal, the Assessor’s argument was “specious” because Owners’ petition was filed within the “express deadline” stated on the Assessor’s Form 11 notice of assessment.  (Page 5, ¶ 14.)  An appeal can be initiated within forty-five days after the Form 11 notice and the notice (which was issued by the Assessor) “even informed the [Owners] they would not be able to file an appeal based on their tax bills.” Id.  In this appeal, “the time for initiating the appeal process has nothing to do with the tax bills that were mailed” to Owners.  Id.

Appeals to the Indiana Board must be filed within forty-five days after the Form 115 final determination notice is mailed.  (Page 5, ¶ 15) (citing Ind. Code § 6-1.1-15-3(d).)  The Board’s date-received stamp was after this date, but the envelope in which the Form 131 appeal petition was mailed was postmarked within the appeal period.  The postmark date on an appeal sent by first class United States mail is prima facie evidence of the date of filing, so Owners’ appeal was allowed.  (Page 5, ¶ 15) (citing 52 IAC 2-3-1(c).)

(Photo used under Creative Commons from Eugene Zemlyanskiy.)

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