FORT WAYNE – Two county offices plan to contract with a tax-management company to investigate the validity of selected Allen County property assessments and homestead credits.
The company will conduct audits and supply data to ensure all taxpayers are treated fairly, the Allen County commissioners were told Friday.
Tax Management Associates Inc. of Charlotte, N.C., will be paid 25 percent of all the new taxes, penalties and interest collected on selected audits referred by the Allen County Auditor’s Office and it will collect fees from the Assessor’s Office based on the value of the property being audited.
For example, if a business has personal property valued at $49,999 or less, the county will pay an audit fee of $400. For a site with an assessed value of more $20 million, the fee would be $10,000.
In the Allen County Auditor’s Office, the process should reveal those who are claiming homestead credits for a property that is not a primary residence, Auditor Tera Klutz said. State law does not allow residents to claim homestead credits on properties that aren’t their primary residences.
For a $150,000 assessed value home, the taxes would be $1,500 with a homestead credit and $3,000 without the credit, Klutz said.
While Klutz said she is unsure how many taxpayers are receiving the homestead credit on property that is not their primary residence, she thinks it is probably less than 5 percent of the county’s 95,000 homesteads.
According to state law, when a taxpayer changes primary residences, he or she has 60 days to notify the county.
Tax Management will supply the auditor’s office with a list of questionable credit claims and county personnel will follow up with the investigation of each one, Klutz said.
Proof of eligibility falls solely to the auditor, Klutz said, and the circumstances of individual situations will be taken into consideration.
If a person is renting an apartment in Ohio because that’s where he found a job, yet his home is in Allen County, we would not take that homestead credit away, Klutz said.
In the Assessor’s Office, the audits will verify the business taxpayer’s personal property assessments, exposing both over- and under-assessed values, Assessor Stacey O’Day said.
It works both ways, O’Day said. If they are overpaying, a refund check will be issued.
While the auditor’s staff makes site visits and verifies all real estate assessments, it must reply on annual self-audit forms submitted by proprietors who list the equipment and personal property inside their businesses, O’Day said.
We have no way of knowing if the self-audits are complete or accurate, she said.
Tax Management will send a team of certified public accounts to each site to verify the personal property information, O’Day said.
It will take two to three years to complete the audits for all 16,000 Allen County businesses claiming personal property, O’Day said.
The three-year contract has a clause that allows for a review and evaluation after 18 months. O’Day said she had researched the company, which has worked with many other Indiana counties.
I talked to 13 county references and they were very happy with the results, O’Day said. No one had ever had to pay more than was collected.
The agreements were unanimously approved, with Commissioner Linda Bloom noting that the audits were likely to uncover some unusual things.