Owner-occupied rebate errors remain on tax rolls

Updated Aug 03, 2014

A tax credit that is supposed to benefit property owners on the homes in which they live appears to have been incorrectly granted to many corporation-owned apartments and rental houses in Clark County, a Springfield News-Sun investigation has found.

In addition, more than 300 property owners received the 2.5-percent Homesite rollback last year on more than one property, even though the tax reduction is supposed to be applied only to one property per owner.

Clark County Auditor John Federer acknowledged the mistakes but said the money involved is so little that it would cost the county more to investigate the problem than it would gain by fixing it. And, he said, a bigger problem with the homesite rollback program is that there may be even more people who qualify for the credit but who aren’t receiving it.

“You must own and occupy your home as your principal place of residence on Jan. 1 of the year you file for the reduction,” according to the county auditor’s web site. For most homeowners, that application is taken care of during the deed transfer by whomever handles the closing.

While hundreds of Clark County property owners appear to be getting the credit on more than one home, how many are truly receiving rebates in error is currently unknown.

Many duplicates involve people who have transferred property within the past year. The duplication should be removed on next year’s tax bill, Federer said.

The total cost of the errors in terms of lost property tax revenue is difficult to quantify because each property has to be checked individually to determine if it is a recent transfer, a land contract or in fact being improperly credited.

With 54,000 residential parcels in the county, Federer said he does not have the resources to weed out possibly a few dozen errors.

“We’re not talking about a $1 million worth of this stuff. We’re talking $10,000, $20,000, $30,000 dollars … I know that it’s not a lot, just from our random sampling,” Federer said.

A Springfield News-Sun analysis of 2013 tax data provided by the auditors office found the following:

For some individuals, multiple credits over multiple years has added up to hundreds off their property taxes.

Thomas Lagos, who owns 407 properties under various corporations, got the owner-occupied credit on 34 of those parcels in 2013, according to the auditor’s office, totalling more than $300 in rebates. That’s in addition to the $166 owner-occupied credit for his residence.

Twenty-three of those properties were transfers within the past year, the auditor’s office said, and the remaining 11 were getting the credit when they shouldn’t be.

The amount of the incorrect rebate is less than one-10th of 1 percent of the total tax bill Lagos paid in 2013, which totals more than $300,000.

“I believe all those predate the current auditor,” Lagos said. He was unaware of the errors and said the rebates are so small individually that he wouldn’t have noticed them. The auditor’s office said errors that have been brought to their attention will be fixed on the next tax bill.

Those existing errors are the result of sloppy data-keeping by his predecessor, according to Federer, and his office has made an effort to clean up those mistakes as they catch them.

“Before I got here there was really obviously not a good process to handle this and make sure that as properties are transferred that we catch it,” he said.

He’s implemented new processes to catch errors on applications, but there remains no automated way to check for duplicates or if a property is actually owner-occupied.

“In reality, we have to believe what (homeowners) tell us. We are not going to question the homeowner when they make a pledge to us,” he said. “If it looks quirky, frankly we’ll ask them.”

With limited staff resources, Federer said the problem isn’t big enough to devote the necessary time to fix at this point.

“I’ve got huge issues and I’ve got to prioritize for the taxpayer,” the auditor said. “I’m not going to let a dollar chase a dime. In three and a half years, I just haven’t had time to get to that yet.”

Overall, the auditor said he suspects there may be more people who are eligible for the owner-occupied credit who are not getting it, than those who are getting it incorrectly.

That’s because many people don’t know it exists, according to Regina Rollins, who administers the rollback for the auditor’s office.

“I didn’t know about (the credit) until I worked here,” she said.

If a homeowner is eligible and has not been receiving the rollback, they can be credited back one year, but not beyond, she said.

Anyone with questions about the Homesite rollback should call Rollins at 937-521-1862.