Property Tax Shortfalls are Common. Here’s how to Recover the Revenue.

Written by: Curtis Coonrod and Benjamin Roeger

[Revised: 7/22/2022]

A common occurrence amongst cities, towns, counties, and townships is that they often do not receive the full amount of property tax revenue that was approved in their respective original budgets.

This issue can often be resolved, but it requires action on the part of local officials.

A comparison between the amount of property tax revenue received and the amount expected in the original budget will typically reveal a discrepancy.  And while there exists a great deal of variance between the amounts associated with such shortfalls, it nevertheless remains prudent to compare how much is actually received to the budget.

Unfortunately, a portion of this discrepancy may be due to circuit breaker credits or delinquencies by taxpayers, for which there are few solutions. 

Still, there are other causes that contribute to most property tax shortfalls, allowing local officials the potential to recover some of the missing revenue. 

The basic challenge is that property tax billing is not an exact science. When property taxes are billed in the spring, counties are generally unaware of the exact amount of the assessed property tax value. Taxpayer appeals, along with other adjustments, may occur after the billing, which can lead, in part, to local units collecting less property tax than initially approved by their boards and the DLGF.

When this occurs, local officials should be counted on to recover the shortfalls. This recovery can go back as far as five years.

For any unit of government this process is relatively straightforward:

-First, identify and document the shortfall using records available from the county auditor.

-Second, advertise the shortfall and make sure to have it included in the next township budget.

-Third, file the appropriate forms with DLGF.

Your local officials may be able to prepare these filings themselves, but it may be worth the cost to hire experienced professionals.

So what’s next?

DLGF guidance: property tax levy appeals, including recovering shortfalls

It may be worth the cost to hire experienced professionals to assist in this process. At no charge, we will research the levies of your unit and provide an estimate of the amount of revenue that has been lost, if any. Once we have determined the amount, we will provide it to you, with no obligation.

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If you have questions or would like further information, please contact us at: Coonrod@Coonrodcpa.com

This article is intended to provide information of general interest to local government officials in Indiana. The information is not guaranteed to be applicable or appropriate in particular circumstances. Local officials should consult competent professionals before acting on any information contained in this article. We are not attorneys. The advice of a legal nature should be sought only from qualified attorneys.

We inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (I) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

Copyright © 2022 C. L. Coonrod & Company, CPA P.C.