Disputing Property Taxes

November 2, 2011 19:46 by Consumer Ed

Dear Consumer Ed:

I received a letter from a private consultant offering to dispute my property taxes with the county. The value of my house has declined significantly in the last year and it is now worth much less than what the property tax bill shows.  Should I accept this offer? How do I know if it's legitimate?

Consumer Ed says: 


If you believe the board of assessors incorrectly calculated the value of your home, you can appeal the assessed value. You do not need a consultant to assist you. The time within which an appeal must be filed may vary from county to county.

The letter you received may or may not be legitimate. Many legitimate companies are currently sending out letters advertising their services in connection with tax appeals. However, new and different scams are discovered all the time, so be careful and thoroughly research the business or person who sent the letter to you.  For example, in 2010, Oregon property owners were flooded with fraudulent solicitations to send in $189 to get their property taxes lowered. The letters, which were made to look like official government documents, stated that due to the drop in property values, residents needed to file for a reassessment of their property taxes. The letters included a purported adjusted assessment and the amount of projected tax savings resulting from an appeal, provided the property owner signed an authorization and included a check for the company's fee.  Similar letters were also sent to residents in California in late 2009.  Even though these property tax scams occurred in different states, it is important to be aware of them because this scam could start occurring here in Georgia.

There are various ways to discover whether a business or person is "legitimate".  If a corporation sent the letter to you, you can look up its name on the Secretary of State's website (www.sos.ga.gov) to see if it is an actual legal entity.  However, just because the corporation is a legal entity is no guarantee that it employs truthful and fair business practices.  If you think you may be interested in its services, you should ask the business to provide references from past customers and, if the company claims to be a member of any professional organizations, you may want to contact the organizations to see whether the business is in good standing.  You can also visit the Better Business Bureau's website (www.bbb.org) to see if anyone has submitted any complaints about the business. 

Two additional things to remember. First, avoid paying money to a business up front. There are many reputable companies who will not charge you in advance. In fact, some companies calculate their fee as a percentage of your first year's tax savings, while others will bill you on an hourly basis and submit a detailed bill for the actual hours they have worked to pursue the appeal.  Second, nevercontract with a company that guarantees a tax reduction; no legitimate company would make such a promise.

If you are not confident that the business or person is legitimate, you may prefer to appeal your property taxes yourself.  In fact, even if the letter you received was from a legitimate business, appealing your property taxes yourself could cost substantially less than hiring someone to do it for you and should not take too much of your time. For information on how to appeal a property tax assessment, go to the Georgia Department of Revenue's website.

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Do senior citizens have to pay property taxes on their home?

November 2, 2011 19:23 by Consumer Ed

Dear Consumer Ed: 

I was told that if you are a senior citizen you no longer have to pay property taxes on your house.  Is this true?

Consumer Ed says:

There are several homestead exemptions offered by the State of Georgia that apply specifically to senior citizens:

  • Individuals 65 years or older may claim an exemption from all state ad valorem taxes on their primary, legal residence and up to 10 acres of land surrounding the residence. Note: This does not apply to or affect county, municipal or school district taxes.
  • Individuals 65 years or older may claim a $4,000 exemption from all state and county ad valorem taxes if the income of that person and his/her spouse did not exceed $10,000 in the previous year (excluding income from retirement sources, pensions and disability income up to the maximum allowable amount under the Social Security Act, which was $55,742 in 2011).
  • Individuals 62 years or older may claim an additional exemption  for educational purposes if the income of that person and his/her spouse does not exceed $10,000 in the previous year (excluding income from retirement sources, pensions and disability income up to the maximum allowable amount under the Social Security Act).

Homestead exemptions are not automatic. The homeowner must apply for the exemption with the tax commissioner's office, or in some counties, the tax assessor's office. 
 
Some county and municipal governments provide additional senior citizen homestead exemptions. To learn if you qualify, contact your local tax assessor's office.

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Refund Anticipation Loans

January 28, 2011 19:41 by Consumer Ed

Dear Consumer Ed:

I’ve seen ads for Refund Anticipation Loans from some of the tax preparers.  Is this really a better, faster way to get my tax refund?

Consumer Ed says:

A Refund Anticipation Loan is a short-term loan in the amount of your expected tax refund, less interest and fees that you must pay the lender or tax preparer.  The advantage is that you can get your money in as little as 24 hours.  There is a downside though, and it’s pretty steep.  First, these loans come with fees and high interest rates. For example, studies by the National Consumer Law Center and Consumer Federation of America show that during 2008, American taxpayers paid approximately $806 million in fees charged in connection with these loans. Another downside is that if your tax refund is less than the anticipated amount, you are still responsible for the full amount of the loan.

A smarter alternative is to e-file your taxes and request the refund via direct deposit. This allows you to get your refund deposited directly to your bank account in about 8 to 10 days.  If your adjusted gross income is $58,000 or less, you can e-file your federal taxes for free. For more information, go to www.irs.gov.

The Volunteer Income Tax Assistance Program (VITA) offers free tax help to people with low to moderate incomes (generally, $49,000 and below) who cannot prepare their own tax returns. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. Most locations also offer free electronic filing. To locate the nearest VITA site, call 1-800-906-9887.

The Tax Counseling for the Elderly (TCE) Program provides free tax help to people aged 60 and older.  Trained volunteers from non-profit organizations provide free tax counseling and basic income tax return preparation for senior citizens.  AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season.  For more information on TCE, call 1-800-829-1040.  To locate the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www.aarp.org.

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