Chapter 14 Compliance Reviews 1

Compliance Review Period Tax assessors must review at least one- eighth of all properties classified under PUV annually to see if they continue to qualify. –A number of counties with more frequent reappraisal cycles have chosen to review more frequently. 2

Compliance Review Form Since a property generally needs to meet the same requirements for continued classification as it met for initial classification, the assessor may ask for information that is very similar to the information requested on an initial application. 3

Compliance Review Form Technically, the assessor cannot ask for a new application as part of a compliance review, but there is nothing wrong with asking for the same information on a compliance review form. 4

Compliance Review Form Types of information that may be requested: –Sound management plans for forestland. –Documentation of compliance with elements of management plan that should already been completed. –Income info for last three years. –IRS Schedule F for farm income. 5

Compliance Review Form Types of information that may be requested: –Acreage in production broken down by acres per product. –Business entity owners—evidence of principal business. –Business entity owner—proof of members participation in farming. –Proof of sound management. 6

Compliance Review Form Types of information that may be requested: –Documentation of weather conditions that may have affected production. –Assessor may ask for assistance from any of several farm related entities. 7

Compliance Review Process There are two types of compliance reviews: –Assessor determines whether property still qualifies based upon currently available information. –Assessor requires further information to determine whether the property still qualifies. 8

Determination without Requesting Additional Information Examples where no additional information may be needed from the property owner: –Property transferred to non-qualifying owner. –Field review shows no active production for several years. –Due to transfer of portion of property, tract has fallen below minimum acreage requirement. 9

Determination without Requesting Additional Information Notification and appeal procedures: –Assessor sends notice that tract no longer qualifies. –Taxpayer has 60 days to appeal to local board. –Taxpayer has no additional time to submit any additional info to assessor, only to county board. 10

Determination When Additional Information Is Requested Notification and appeal procedures: –Assessor sends out questionnaire or specific request for information in order to determine eligibility. –Owner has 60 days to provide requested info. –If the assessor requests additional information after initial information is returned, owner has additional 60 days. 11

Determination When Additional Information Is Requested If owner submits information and assessor determines property is not eligible: –Property loses PUV classification and deferred taxes are due and payable. –Owner has 60 days to appeal to the local board. –Owner can submit new info only to local board. 12

Determination When Additional Information Is Requested If owner has not submitted information and assessor determines property is not eligible: –Loses PUV classification and deferred taxes are due and payable. –Owner has 60 days from the date of the notice to appeal to local board. –However, if owner submits the previously requested information within 60 days of notice

Determination When Additional Information Is Requested If owner submits the previously requested information within 60 days of notice: –Assessor must consider the information and render a new decision. –Owner then has an additional 60 days to appeal to local board. –If the information shows the property is still eligible, the assessor must reinstate classification to date when property was taken out and must refund any deferred taxes that have been paid. 14

15 Compliance Review Examples

1-Q Assessor is conducting compliance reviews and notices that a tract in forestry PUV has less than 20 acres in forestry. The owner owns no other tracts in PUV. The assessor has not sent a questionnaire to property owner. The assessor notifies the owner that the property has been disqualified and the deferred taxes are billed. 16

1-A The assessor may disqualify the property without requesting additional information if the assessor believes no further information is needed. If the owner wishes to submit information, the owner must appeal the decision of the assessor within 60 days and the information can be submitted with the appeal. Because the assessor never requested any additional information, the owner does not have the mandated additional 60 days to provide the assessor with additional information. The local board may consider the information as part of the appeal. 17

2-Q Assessor is conducting compliance reviews and sends questionnaires to a number of PUV properties. Owner returns the completed questionnaire, the assessor requests additional information which the owner then provides. The assessor determines that the property no longer qualifies. Notice is sent to the owner and deferred taxes are billed. The owner now wishes to submit unrequested additional information for the assessor to consider. 18

2-A Since the owner has provided the requested information, the owner must appeal the decision of the assessor within 60 days. If the owner wishes to submit unrequested additional information, the owner does not have the mandated additional 60 days to provide the assessor with additional information. The local board can consider the unrequested information as part of the appeal. 19