Upon concluding a reverse audit, we determined the value of the personal property at a glass container facility to be $10 million. We sent a report detailing our findings to the client, who in turn sent a completed return to the assessor. When assessment notices came out, however, the assessor had reported a value of approximately $12 million.
When questioned by the taxpayer about his rational for the $12 million value, he responded that he was “tired of the personal property value going down” and decided to keep the value the same as it had been for the previous owners the year before. Unbeknownst to the taxpayer, the assessor and the previous owners of the plant had a rocky relationship, and the assessor decided to continue this adversarial relationship even though the plant had been sold to new owners.
After talking with the assessor, it appeared he was not interested in the facts nor in establishing a good relationship with the new owners. Since the assessor failed to present any logical evidence for maintaining the previous year’s assessment, the company decided to appeal. Little did they know that what began as a straightforward appeal was soon to resemble a Grisham novel. They had come face-to-face with . . . The Runaway Assessor.
Who is the Runaway Assessor? Sorry, we can’t reveal names. But generally speaking, Runaway Assessors are the great nemeses of corporate tax professionals; they dig in and fight for unrealistic values, even when faced with overwhelming evidence. When they are opposed, Runaway Assessors have been known to inflate already unrealistic values. They often develop a strong dislike for a particular taxpayer or taxpayers in general and take a punitive approach when making their assessments. While the great majority of assessors work cooperatively and fairly with taxpayers, the Runaway Assessor can cause a taxpayer to lose sleep.
In this saga, the Runaway Assessor disputed the appeal. He admitted his original value on the personal property was miscalculated—miscalculated too low that is! On revision he claimed it should have been almost 50% higher—an increase from $12 million to approximately $17 million for that tax year! A second appeal (to court) resulted in yet another tax hike. The more the taxpayer appealed and presented information, the more the assessor resisted and raised the values. The single-year appeal snowballed into a multi-year appeal, with the assessor ultimately hiking the value by nearly 5 times in the process.
Unfortunately for the Runaway Assessor, his arguments did not prevail in court. In the end the taxpayer prevailed, getting their $10 million value.