A contingent fee is a fee for services provided that is only payable if there is a positive result.  Most commonly we think of attorney or consultant relationships when we think of contingency fees.  A contingent fee is usually a percentage of the customer’s net recovery.  Contingency fees provide a powerful motivation for attorneys and consultants to work diligently on behalf of their customers to maximize results.

Now there’s a new group allowed to work on a contingent fee basis, sheriffs in Louisiana.  Under a Court of Appeals ruling the 64 sheriffs in Louisiana can now demand commissions of 12-17 percent of what they collect in property taxes on behalf of other government agencies going forward.  They can even go back all the way to 1978 for past commissions.

Livingston Parish Sheriff Willie Graves collected taxes for the Livingston Parish Council of Aging and charged a 12% commission, totaling about $400k since 2004.  The Council of Aging asked for a refund, citing that is was unlawful for him to charge commissions, and won the ensuing civil suit.  Graves appealed and won at the Court of Appeals, which set the new precedent.  Additionally, it was ruled that his 12% commission could actually be a 17% commission.

Sounds like this might get messy!  Sheriffs allowed to go back 30+ years to collect commissions from other government agencies.  Hey, I wonder if they can do that on a contingency basis.

According to NorthJersey.com news, Rabbi Shmuley Boteach, author of bestsellers including “Kosher Sex”, “Kosher Jesus”, “Kosher Sutra” and “Kosher Adultry”, is seeking approval to convert a caretaker house on his Englewood, NJ property to a synagogue.  His rational is that he holds services in the caretaker house.  Fair enough. 

If the city approves the conversion he would basically sell the whole property, valued by the assessor at around $2.5 million, to “This World”, a non-profit that he heads.  The non-profit could then seek to have the whole property, including the significantly larger home in which his family lives and the indoor pool in which they presumably swim,  exempted from its $63k property tax liability.

Apparently Boteach’s neighbor, the Libyan Mission to the United Nations, already has a property tax exemption as a non-profit.  So, there might be a precedent.  According to thefreedictionary.com, the slang for “kosher” means “legitimate”.  I have nothing against the Rabbi and the good work that he does, but I’m just wondering, is this really a kosher property tax exemption?

You ever have that lingering check that hasn’t been cashed when trying to reconcile your checking account?  Usually, it’s for $10 written to someone in your family who has lost it.  A bit of a nuisance but nothing you can’t get over.

What if it was $100 million in uncashed checks?  According to the Birmingham Business Journal, the Jefferson County Tax Collector has almost $100 million in unopened and undeposited property tax checks locked at the courthouse.  Why?  Not enough workers on staff to open the mail.  According to the collector, his staff has been cut from 40 to 17 in an effort to save money.

Wow!  What a dilemma.  How about enlisting a volunteer collection department?  Kind of like a volunteer fire department.  Only instead of putting out fires they’d be cashing checks.  I’m not one for excessive government spending but did anyone stop to think that in an effort to save money you might lose money?  What is the daily interest rate on $100 million anyway?

We all know what happens when we assume.  Or do we?  When the city of Miami decided to spend $487 million to help the Miami Marlins build a new stadium, thousands of taxpayers were unhappy.  When the city of Miami decided to spend another $100 million to build new parking garages for the stadium, thousands of taxpayers were downright angry.  Now those same taxpayers are furious because the city may be stuck with the property tax liability on the parking garages, to the tune of potentially $1.2 million per year.

Apparently the city assumed the parking garages would be exempt from property taxes since they were being funded and owned by the city.  However, according to Florida statutes property must be used solely for public purposes in order to be exempt from property taxes.  In this case the garages have been leased to the Marlins, who plan to charge for parking.  Not exactly a public purpose.

The Marlins, on the other hand, did not assume anything.  They made sure to include a clause in their contract with the city which specifically states that the city is responsible for any taxes on the facilities.  Even with the revenue the city will receive from the lease, it will not be enough to cover the property taxes.  That may have to come directly out of the city’s budget.  Ouch!  I’m pretty sure the city of Miami is now keenly aware of what happens when we assume.

As 2011 comes to an end, I’d like to take the opportunity to thank you for being part of the “A Tax to Grind” community.  Here’s to a prosperous 2012, a year in which we continue to be enlightened and entertained!

Year’s end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us. -Hal Borland