» When a tax appeal bites you back

When a tax appeal bites you back

July 22, 2008 by Carol Katarsky
Posted in: Best practices, Special report, Tax compliance

Imagine: You get a letter from the city or state saying you have to testify regarding your company’s tax appeal — but you never filed an appeal. It’s time to worry, and here’s why.

It’s a situation more companies are finding themselves in. But it’s not a scam or would-be con artist you have to worry about. It’s more likely the local school district.

In states that allow it, cities and school districts can issue a “reverse appeal” if they think your company’s property tax assessment is too low. And since schools and many smaller cities get the bulk of their funding from property taxes, they have every motivation to look twice at your assessments.

When that happens, you can get called into a hearing to “justify” your assessment.

If your company is subject to a reverse appeal, chances are you’ll wind up paying more than you are now. The wee bit of good news is that you may be able to talk the assessment down from the stratosphere to a more reasonable (but still higher) number.

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