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Case 3 – The Case of the Doubling Size


Situation:

During the comprehensive initial review of an existing client's recently acquired property E&A secured a copy of the Tax Assessor's appraisal record. The appraisal record was compared to our in-house property inspection report. The procedure, a basic procedure at E&A, immediately indicated that something was amiss.

Problem:
The building size on the Assessor's commercial property record card was incorrect. The card indicated that the office building was 20,000 square feet. In fact, it was only 10,000 square feet, 5,000 feet on each of two floors, on a 20,000 square foot site. Apparently an interpolation error on the part of the Assessor's office. Due to this error the improvement value was being double assessed and taxed. However, the purchase price was very close to the Assessor's taxable value of the property. A fact that the former owner's tax professional probably relied upon in it's review of the assessment.

Solution:
An updated spotted survey of the property had been completed for the purchase. It confirmed the error. An appeal was filed with the taxing authority not only for correction of the mathematical error but also for refund of taxes paid during the prior three years. Because our client bought the property as a going concern they realized the benefit for all years.

Results:
A typical taxpayer would have readily accepted the assessor's valuation given the purchase price. That is why it is very important to have an experienced property tax professional who will not only review the valuation but also the accuracy and equity of an assessment before accepting it.

Correction of this error resulted in multiple year tax savings and a refund of $45,000.00.


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