Should You Represent Yourself When Filing A Tax Appeal (by Stephen Severud)


While presenting tax appeal seminars over the past several years, I am repeatedly asked the question of whether someone needs an attorney to file a tax appeal. The answer is no, you do not need an attorney, but, before you decide to go forward without an attorney, you should ask yourself, do I have the expertise to successfully handle an appeal?

A situation that presents a similar question regarding the need for a professional is when a pipe bursts and is flooding your home. Before calling a plumber you ask yourself, do I have the expertise to fix the pipe? Some people do, as they have plumbing experience, but most do not and should not even attempt to proceed without a professional.

If you do not have some background in real estate appraisal or handling lawsuits, I submit that you should do the same thing that I would do if a pipe burst in my home, call a professional. The financial stakes are too high to proceed any other way.

In representing clients before many County Tax Boards throughout the State, I have had the opportunity to watch the manner in which these Boards handle various types of cases, including the homeowner who has chosen to represent themselves in a tax appeal. While the appeal process was much less structured and County Tax Boards more lenient in their mode of operation 10 or more years ago, the number of appeals and the amount of tax money being paid out by municipalities in more recent years has caused a dramatic change in how these cases proceed.

A tax appeal is an adversarial process. Many people do not think of it this way, but filing an appeal is filing a lawsuit against the town that claims as its basis that the assessor did not set the correct value on your property. The towns and the assessors interests are the opposite of yours. The assessor is not there as your representative or to act against the interests of their employer – the town.Tax appeals are governed by the same rules of evidence and procedure as every other lawsuit in Superior Court. While many County Tax Boards relax these rules somewhat, it remains the taxpayers burden to present evidence that proves that their assessment is too high.

In residential appeals, the normal evidence that is presented is comparable sales. In other types of appeals, the income approach or cost approach may be the most appropriate means of determining a value. Selecting those comparable sales is critical and the place where most pro se taxpayers cases fall apart. Demonstrating this is the rapidly growing number of people each year who have filed their own appeal at the County Tax Board and not received any reduction and then hire me to appeal the County Tax Board decision to the State Tax Court.The cases with pro se taxpayers generally fall into several classes. One is where the homeowner is a real estate appraiser or a real estate agent. They have the professional background to select comparable sales and present them to the Board to hopefully obtain a positive outcome.

The next group is people who know a realtor who provides them with comparable sales or who use an on-line service that selects comparable sales. The first question from either the Board or from the town will be who selected the comparable sales? If the taxpayer answers that their friend, a realtor, selected them, you may not notice it, but if you listen carefully to the questioning, the Board has already decided your case and you will not get any reduction. If an appraiser or an on-line service provided the comparables, the town has a right to ask questions of the person who selected the comparables.  If that person is not present at the hearing, whether its the realtor or the on-line service, then the comparables are not allowed in as evidence. Without evidence, there is no proof that the assessment is wrong and the assessment will not change.

We then address the situation where the taxpayer selects the comparables. The questions that will be asked include have you ever been inside the comparable? The vast majority of the time the answer is no. Which raises the follow up question, If you havent been in the comparable, how do you know it is comparable? Price does not determine comparability. It is physical features of the home, such as square footage, quality of construction, effective age of the improvements, number of bedrooms and baths, size of lot, age of house, age of any remodeling, etc. that determine comparability. And if you use the Multiple Listing Service (MLS) to get the background information, as you are not a licensed professional, you are not entitled to rely upon the MLS information as reliable.

Appraisers start with the MLS, but then confirm the information contained therein to ensure its reliability or to obtain the correct information for their report.Most important in the decision on whether to proceed pro se or not is the timing of when you can expect to receive any reduction in taxes or refund that you believe you are due.

The filing deadline for appeals is April 1 (May 1 if the town did a revaluation). Most County Tax Boards try to complete their hearings by June 30. This has been extended in many counties due to the number of appeals that have been filed which many times makes it physically impossible to complete all of the hearings by June 30. If the hearing is completed by June 30, you can expect to have a decision by July 31. If you received a reduction in your assessment, the reduction will show on your 4th quarter tax bill.

If you are not successful and decide to appeal the County Tax Board decision, the current timeline for residential cases processing through the State Tax Court is 12 to 18 months. That means that your appeal that you filed in March, 2012, and appealed to the State Tax Court in July, 2012, will likely be scheduled for hearing in Tax Court sometime in the Summer of 2013. If you settle the case with the town, it takes approximately 5 months for your judgment to be issued by the Tax Court Clerks office. Summer of 2013 just became the end of 2013. The town then has 60 days to issue you a refund – extending that time frame to early 2014.

Remember that you have to continue to pay the taxes at the higher level until that decision is rendered. Then you will get a refund for 2012, without any interest on the refund, as that is waived as a condition of any settlement.If you try the case in State Tax Court, you will normally receive your decision much sooner. But as you are now in Tax Court, all of the rules of evidence and procedure apply. If you are not familiar with these rules, it is easy to make a misstep that will eliminate any possibility of obtaining any refund. And the discussion of appropriate evidence set out above, regarding the evidence that you are attempting to present to the Court, is repeated here. The trial in Tax Court is a new proceeding where you are required to prove your case in its entirety, by competent, admissible evidence. Presenting something short of that will result in your not obtaining any reduction in your assessment for your 2 years of fighting through the property tax appeal system.

I’m sure you’ve heard stories from neighbors that have gone through the appeal process and been successful. It is likely that they were so far over-assessed to begin with that the assessor felt obligated to lower the assessment. Your case may not be so clear cut and any attempt on your part to discuss the neighbors change in assessment as a valid basis for your obtaining a reduction in your assessment will generally result in your not achieving any reduction in your assessment. The County Tax Board is not allowed to consider assessments on other homes in your neighborhood – only competent evidence of sales that occurred during the appropriate time frame.

Before you decide to go forward and represent yourself in a tax appeal, call me to discuss your situation.

Stephen N. Severud, Esq., P.C.

Valley Professional Center

59 East Mill Road

Long Valley, NJ 07853

Phone (908) 876-8700 Fax (908) 876-8703

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