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May 18

Written by: egblogger
5/18/2016 8:51 AM  RssIcon

Few people would ignore notices by mail from the IRS or their mortgage company, but many do not pay attention to notices sent by appraisal districts, local taxing authorities, or local courts.  This story from the Fort Worth Star Telegram illustrates what can go wrong when a property owner either disregards or does not receive these important notices.

When an appraisal district plans to take adverse action against a property owner, the Tax Code generally requires it to send a notice describing the action that has occurred or may occur.  Examples include placing property on the appraisal roll, raising a value, removing an exemption, or many other events.  A property owner then has a set time period during which he or she can contest the action if necessary (or prepare to deal with it).  

Fortunately, the linked story has a good ending for the homeowners, but it is also a cautionary tale for other property owners in the state of Texas (and most other states).  In order to reach the point where a property gets sold at auction for delinquent taxes, the appraisal district would have been required to send a notice of removal of the exemption, and this typically follows a verification letter. Without a response, the appraisal district notifies the tax office that additional taxes are owed, and the tax office sends a tax bill with a delinquency date.  Once the taxes go delinquent,  more notices are sent, and eventually the tax office files a suit to collect the delinquent taxes.  In order to proceed with the suit, the owner must typically be served by certified mail or by the sheriff.  If this still does not prompt a response from the owner, the tax office will take a judgment, and the district clerk is required to send yet another notice of the judgment to the owner.  Once a judge hears the case and grants judgment against the owner, the tax office can (and does) proceed with a sale of the property, after which the buyer contacts the new owner and directs them to relinquish possession of the property.

In this case, Tarrant Appraisal District did send two formal notices to the owners prior to removing the exemption, and the owners could have contacted the district to make sure the exemption and deferral were not removed.  This would have prevented the tax bills for the deferred taxes, and none of the subsequent delinquent tax collection actions (including the sale of the house) would have occurred. 

Two key points:

1) If you are disabled or over 65, you can file the tax deferral affidavit anytime up until the property is sold, and it will stop all further collection efforts (See Texas Tax Code Section 33.06). 

2) The protections in the tax code are based on the fundamental constitutional concept of due process that requires notice and an opportunity to be heard before a governmental entity can take adverse action.  However, this protection depends on the owner responding to the notice. 

In Texas, if you ignore a notice from the appraisal district or a tax office, you do so at your own peril.

Copyright ©2016 egblogger

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