THE PENALTY BOX T HE L AW , R EQUIREMENTS A ND D EALING WITH T - - PowerPoint PPT Presentation

THE PENALTY BOX

THE LAW, REQUIREMENTS AND DEALING WITHTAXPAYERS

THE PENALTY BOX

JEFFREY “MAD DOG” SCHARF & GARY “DR. HOOK” SABEAN TAXING AUTHORITY CONSULTING SERVICES, P.C. THE LAW, REQUIREMENTS AND DEALING WITHTAXPAYERS

THE PENALTY BOX

WITH ASSISTANCE FROM: JOHN “MCSHIFTY” RIFE ANDY “LEFTY” NEVILLE & MARK “BOOM BOOM” AMES

THE LAW, REQUIREMENTS AND DEALING WITHTAXPAYERS

PENALTY

• 1. a punishment imposed for breaking a law, rule, or contract.

"the charge carries a maximum penalty of ten years' imprisonment"

• 2. a disadvantage or unpleasant experience suffered as the result of an action or

circumstance. "the cold never leaves my bones these days—one of the penalties of age"

AND WE ALL DEAL WITH PENALTIES IN OUR LIFE…

AND WE ALL DEAL WITH PENALTIES IN OUR LIFE…

§ 58.1-3915. PENALTY FOR FAILURE TO PAY TAXES BY DECEMBER 5.

Except as otherwise provided by ordinance under § 58.1-3916, any person failing to pay any county, town and city levies on or before December 5 shall incur a penalty thereon of five percent, which shall be added to the amount of taxes or levies due from such taxpayer, and which, when collected by the treasurer, shall be accounted for in his settlements. No penalty shall be imposed for failure to pay any tax if such failure was not the fault of the taxpayer.

§ 58.1-3916. COUNTIES, CITIES AND TOWNS MAY PROVIDE DATES FOR FILING RETURNS, SET PENALTIES, INTEREST, ETC.

• verpayment of local taxes has been made in an action brought pursuant to § 58.1-3984 shall award interest at the appropriate rate, notwithstanding the failure of the locality to conform its ordinance to the requirements of this

• deployment. For purposes of this section, "the armed services of the United States" includes active duty service with the regular Armed Forces of the United States or the National Guard or other reserve component.

• f the date of the assessment, and for 30 days after the date of the final determination of the appeal, provided that nothing in this paragraph shall be construed to preclude the assessment or refund, following the final determination
• f such appeal, of such interest as otherwise may be provided by general law as to that portion of a tax bill that has remained unpaid or was overpaid during the pendency of such appeal and is determined in such appeal to be

• r A 20 of § 58.1-3506, which remains unpaid after 10 days' written notice sent by United States mail to the taxpayer of the intention to impose a penalty pursuant hereto, the penalty shall not exceed an amount equal to the

• rdinance of the local governing body in jurisdictions not having a treasurer, upon ascertaining that a property transfer has occurred, may invalidate a bill sent to the prior owner and reissue the bill to the new owner as permitted

§ 58.1-3916. COUNTIES, CITIES AND TOWNS MAY PROVIDE DATES FOR FILING RETURNS, SET PENALTIES, INTEREST, ETC.

Notwithstanding provisions contained in §§ 58.1-3518,58.1-3900, 58.1-3913, 58.1-3915, and 58.1-3918, the governing body of any county, city, or town may provide by ordinance the time for filing local license applications and annual returns of taxable tangible personal property, machinery and tools, and merchants' capital. The governing body may also by ordinance establish due dates for the payment of local taxes; may provide that payment be made in a single installment or in two equal installments; may offer options, which may include coupon books and payroll deductions, which allow the taxpayer to determine whether to pay the tangible personal property tax through monthly, bimonthly, quarterly, or semiannual installments or in a lump sum, provided such taxes are paid in full by the final due date; may provide by ordinance penalties for failure to file such

applications and returns and for nonpayment in time; may provide for payment of interest on delinquent taxes; and may provide for the recovery of reasonable attorney's or collection agency's fees actually

contracted for, not to exceed 20 percent of the delinquent taxes and other charges so collected. A locality that provides for payment of interest on delinquent taxes shall provide for interest at the same rate on overpayments due to erroneously assessed taxes to be paid to the taxpayer, provided that no interest shall be required to be paid on such refund if (i) the amount of the refund is $10 or less or (ii) the refund is the result of proration pursuant to § 58.1-3516. A court that finds that an overpayment of local taxes has been made in an action brought pursuant to § 58.1-3984 shall award interest at the appropriate rate, notwithstanding the failure of the locality to conform its ordinance to the requirements of this section.

§ 58.1-3916. COUNTIES, CITIES AND TOWNS MAY PROVIDE DATES FOR FILING RETURNS, SET PENALTIES, INTEREST, ETC.

Interest may commence not earlier than the first day following the day such taxes are due by ordinance to be filed, at a rate not to exceed 10 percent per year. The governing body may impose interest at a rate not to exceed the rate of interest established pursuant to § 6621 of the Internal Revenue Code of 1954, as amended, or 10 percent annually, whichever is greater, for the second and subsequent years of delinquency. No penalty

for failure to pay a tax or installment shall exceed (i) 10 percent of the tax past due on such property; (ii) in the case of delinquent tangible personal property tax more than 30 days past due on property classified pursuant to subdivision A 15, A 16, or A 20 of § 58.1-3506, which remains unpaid after 10 days' written notice sent by United States mail to the taxpayer of the intention to impose a penalty pursuant hereto, the penalty shall not exceed an amount equal to the difference between the tax due and owing with respect to such property and the tax that would have been due and owing if the property in question had been classified as general tangible personal property pursuant to § 58.1- 3503; (iii) in the case of delinquent tangible personal property tax more than 30 days past due, 25 percent of the tax past due on such tangible personal property; (iv) in the case of delinquent remittance of excise taxes on meals, lodging, or admissions collected from consumers, 10 percent for the first month the taxes are past due, and five percent for each month thereafter, up to a maximum

• f 25 percent of the taxes collected but not remitted; or (v) $10, whichever is greater, provided,

however, that the penalty shall in no case exceed the amount of the tax assessable. No penalty for failure to file a return shall

be greater than 10 percent of the tax assessable on such return or $10, whichever is greater; provided, however, that the penalty shall in no case exceed the amount of the tax assessable. The assessment of such penalty shall not be deemed a defense to any criminal prosecution for failing to make return of taxable property as may be required by law or ordinance. Penalty for failure to file an application or return may be assessed on the day after such return or application is due; penalty for failure to pay any tax may be assessed on the day after the first installment is due. Any such penalty when so assessed shall become a part of the tax. No penalty for failure to pay any tax shall be imposed for any assessment made later than two weeks prior to the day on which the taxes are due, if such assessment is made thereafter through the fault of a local official, and if such assessment is paid within two weeks after the notice thereof is mailed.

SO BASIC MAXIMUM PENALTY IS 10% OR $10.00; NOT TO EXCEED THE AMOUNT OF THE TAX

Interest may commence not earlier than the first day following the day such taxes are due by ordinance to be filed, at a rate not to exceed 10 percent per year. The governing body may impose interest at a rate not to exceed the rate of interest established pursuant to § 6621 of the Internal Revenue Code of 1954, as amended, or 10 percent annually, whichever is greater, for the second and subsequent years of delinquency. No penalty for failure to pay a tax or installment shall exceed (i) 10 percent of the tax past due on such property; (ii) in the case of delinquent tangible personal property tax more than 30 days past due on property classified pursuant to subdivision A 15, A 16, or A 20 of § 58.1-3506, which remains unpaid after 10 days' written notice sent by United States mail to the taxpayer of the intention to impose a penalty pursuant hereto, the penalty shall not exceed an amount equal to the difference between the tax due and owing with respect to such property and the tax that would have been due and owing if the property in question had been classified as general tangible personal property pursuant to § 58.1-3503; (iii) in the case of delinquent tangible personal property tax more than 30 days past due, 25 percent of the tax past due on such tangible personal property; (iv) in the case of delinquent remittance of excise taxes on meals, lodging, or admissions collected from consumers, 10 percent for the first month the taxes are past due, and five percent for each month thereafter, up to a maximum of 25 percent of the taxes collected but not remitted; or (v) $10, whichever is greater, provided, however, that the penalty shall in no case exceed the amount of the tax assessable. No penalty for failure to file a return shall be greater than 10 percent of the tax assessable on such return or $10, whichever is greater; provided, however, that the penalty shall in no case exceed the amount of the tax assessable. The assessment of such penalty shall not be deemed a defense to any criminal prosecution for failing to make return of taxable property as may be required by law or

• rdinance. Penalty for failure to file an application or return may be assessed on the day after such return or

application is due; penalty for failure to pay any tax may be assessed on the day after the first installment is due. Any such penalty when so assessed shall become a part of the tax. No penalty for failure to pay any tax shall be imposed for any assessment made later than two weeks prior to the day on which the taxes are due, if such assessment is made thereafter through the fault of a local official, and if such assessment is paid within two weeks after the notice thereof is mailed.

§ 58.1-3916. COUNTIES, CITIES AND TOWNS MAY PROVIDE DATES FOR FILING RETURNS, SET PENALTIES, INTEREST, ETC.

Interest may commence not earlier than the first day following the day such taxes are due by ordinance to be filed, at a rate not to exceed 10 percent per year. The governing body may impose interest at a rate not to exceed the rate of interest established pursuant to § 6621 of the Internal Revenue Code of 1954, as amended, or 10 percent annually, whichever is greater, for the second and subsequent years of delinquency. No penalty

for failure to pay a tax or installment shall exceed (i) 10 percent of the tax past due on such property; (ii) in the case of delinquent tangible personal property tax more than 30 days past due on property classified pursuant to subdivision A 15, A 16, or A 20 of § 58.1-3506, which remains unpaid after 10 days' written notice sent by United States mail to the taxpayer of the intention to impose a penalty pursuant hereto, the penalty shall not exceed an amount equal to the difference between the tax due and owing with respect to such property and the tax that would have been due and owing if the property in question had been classified as general tangible personal property pursuant to § 58.1- 3503; (iii) in the case of delinquent tangible personal property tax more than 30 days past due, 25 percent of the tax past due on such tangible personal property; (iv) in the case of delinquent remittance of excise taxes on meals, lodging, or admissions collected from consumers, 10 percent for the first month the taxes are past due, and five percent for each month thereafter, up to a maximum

• f 25 percent of the taxes collected but not remitted; or (v) $10, whichever is greater, provided,

however, that the penalty shall in no case exceed the amount of the tax assessable. No penalty for failure to file a return shall

be greater than 10 percent of the tax assessable on such return or $10, whichever is greater; provided, however, that the penalty shall in no case exceed the amount of the tax assessable. The assessment of such penalty shall not be deemed a defense to any criminal prosecution for failing to make return of taxable property as may be required by law or ordinance. Penalty for failure to file an application or return may be assessed on the day after such return or application is due; penalty for failure to pay any tax may be assessed on the day after the first installment is due. Any such penalty when so assessed shall become a part of the tax. No penalty for failure to pay any tax shall be imposed for any assessment made later than two weeks prior to the day on which the taxes are due, if such assessment is made thereafter through the fault of a local official, and if such assessment is paid within two weeks after the notice thereof is mailed.

ADDITIONAL PENALTY DELINQUENT PP MORE THAN 30 DAYS DELINQUENT= UP TO 25% DELINQUENT TRUST TAXES (MEALS/HOTEL/ADMISSIONS)= 10% FOR FIRST MONTH AND 5% PER MONTH THEREAFTER UP TO 25%

Interest may commence not earlier than the first day following the day such taxes are due by ordinance to be filed, at a rate not to exceed 10 percent per year. The governing body may impose interest at a rate not to exceed the rate of interest established pursuant to § 6621 of the Internal Revenue Code of 1954, as amended, or 10 percent annually, whichever is greater, for the second and subsequent years of delinquency. No penalty for failure to pay a tax or installment shall exceed (i) 10 percent of the tax past due on such property; (ii) in the case of delinquent tangible personal property tax more than 30 days past due on property classified pursuant to subdivision A 15, A 16, or A 20 of § 58.1-3506, which remains unpaid after 10 days' written notice sent by United States mail to the taxpayer of the intention to impose a penalty pursuant hereto, the penalty shall not exceed an amount equal to the difference between the tax due and owing with respect to such property and the tax that would have been due and owing if the property in question had been classified as general tangible personal property pursuant to § 58.1-3503; (iii) in the case of delinquent tangible personal property tax more than 30 days past due, 25 percent of the tax past due on such tangible personal property; (iv) in the case of delinquent remittance of excise taxes on meals, lodging, or admissions collected from consumers, 10 percent for the first month the taxes are past due, and five percent for each month thereafter, up to a maximum of 25 percent of the taxes collected but not remitted; or (v) $10, whichever is greater, provided, however, that the penalty shall in no case exceed the amount of the tax assessable. No penalty for failure to file a return shall be greater than 10 percent of the tax assessable on such return or $10, whichever is greater; provided, however, that the penalty shall in no case exceed the amount of the tax

• assessable. The assessment of such penalty shall not be deemed a defense to any criminal

prosecution for failing to make return of taxable property as may be required by law or

• rdinance. Penalty for failure to file an application or return may be assessed on the day

after such return or application is due; penalty for failure to pay any tax may be assessed

• n the day after the first installment is due. Any such penalty when so assessed shall

become a part of the tax. No penalty for failure to pay any tax shall be imposed for any assessment made later than two weeks prior to the day on which the taxes are due, if such assessment is made thereafter through the fault of a local official, and if such assessment is paid within two weeks after the notice thereof is mailed.

THIS IS ONLY A MAXIMUM THE LOCALITY CAN ADOPT AN ORDINANCE FOR A LESSER AMOUNT OR CHANGE THE TIMING OF THE ADDITIONAL PENALTY

Interest may commence not earlier than the first day following the day such taxes are due by ordinance to be filed, at a rate not to exceed 10 percent per year. The governing body may impose interest at a rate not to exceed the rate of interest established pursuant to § 6621 of the Internal Revenue Code of 1954, as amended, or 10 percent annually, whichever is greater, for the second and subsequent years of delinquency. No penalty for failure to pay a tax or installment shall exceed (i) 10 percent of the tax past due on such property; (ii) in the case of delinquent tangible personal property tax more than 30 days past due on property classified pursuant to subdivision A 15, A 16, or A 20 of § 58.1-3506, which remains unpaid after 10 days' written notice sent by United States mail to the taxpayer of the intention to impose a penalty pursuant hereto, the penalty shall not exceed an amount equal to the difference between the tax due and owing with respect to such property and the tax that would have been due and owing if the property in question had been classified as general tangible personal property pursuant to § 58.1-3503; (iii) in the case of delinquent tangible personal property tax more than 30 days past due, 25 percent of the tax past due on such tangible personal property; (iv) in the case of delinquent remittance of excise taxes on meals, lodging, or admissions collected from consumers, 10 percent for the first month the taxes are past due, and five percent for each month thereafter, up to a maximum of 25 percent of the taxes collected but not remitted; or (v) $10, whichever is greater, provided, however, that the penalty shall in no case exceed the amount of the tax assessable. No penalty for failure to file a return shall be greater than 10 percent of the tax assessable on such return or $10, whichever is greater; provided, however, that the penalty shall in no case exceed the amount of the tax

• assessable. The assessment of such penalty shall not be deemed a defense to any criminal

prosecution for failing to make return of taxable property as may be required by law or

• rdinance. Penalty for failure to file an application or return may be assessed on the day

after such return or application is due; penalty for failure to pay any tax may be assessed

• n the day after the first installment is due. Any such penalty when so assessed shall

become a part of the tax. No penalty for failure to pay any tax shall be imposed for any assessment made later than two weeks prior to the day on which the taxes are due, if such assessment is made thereafter through the fault of a local official, and if such assessment is paid within two weeks after the notice thereof is mailed.

§ 58.1-3916. COUNTIES, CITIES AND TOWNS MAY PROVIDE DATES FOR FILING RETURNS, SET PENALTIES, INTEREST, ETC.

Penalty and interest for failure to file a return or to pay a tax shall not be imposed if such failure was not the fault of the taxpayer, or was the fault of the commissioner of revenue or the treasurer, as the case may be. The failure to file a return or to pay a tax due to the death of the taxpayer or a medically determinable physical or mental impairment on the date the return or tax is due shall be presumptive proof of lack of fault on the taxpayer's part, provided the return is filed or the taxes are paid within 30 days of the due date; however, if there is a committee, legal guardian, conservator or other fiduciary handling the individual's affairs, such return shall be filed or such taxes paid within 120 days after the fiduciary qualifies or begins to act on behalf of the taxpayer. Interest on such taxes shall accrue until paid in full. Any such fiduciary shall, on behalf of the taxpayer, by the due date, file any required returns and pay any taxes that come due after the 120-day period. The treasurer shall make determinations of fault relating exclusively to failure to pay a tax, and the commissioner of the revenue shall make determinations of fault relating exclusively to failure to file a return. In jurisdictions not having a treasurer or commissioner of the revenue, the governing body may delegate to the appropriate local tax officials the responsibility to make the determination of fault. This section shall be the sole authority for local ordinances setting due dates of local taxes and penalty and interest thereon, and shall supersede the provisions of any charter or special act.

§ 58.1-3916. COUNTIES, CITIES AND TOWNS MAY PROVIDE DATES FOR FILING RETURNS, SET PENALTIES, INTEREST, ETC.

Penalty and interest for failure to file a return or to pay a tax shall not be imposed if such failure was not the fault of the taxpayer, or was the fault of the commissioner

• f revenue or the treasurer, as the case may be. The failure to file a return or to pay a tax due to the

death of the taxpayer or a medically determinable physical or mental impairment on the date the return or tax is due shall be presumptive proof of lack of fault on the taxpayer's part, provided the return is filed or the taxes are paid within 30 days of the due date; however, if there is a committee, legal guardian, conservator or other fiduciary handling the individual's affairs, such return shall be filed or such taxes paid within 120 days after the fiduciary qualifies or begins to act on behalf of the taxpayer. Interest on such taxes shall accrue until paid in full. Any such fiduciary shall, on behalf of the taxpayer, by the due date, file any required returns and pay any taxes that come due after the 120-day period. The treasurer shall make determinations of fault relating exclusively to failure to pay a tax, and the commissioner of the revenue shall make determinations of fault relating exclusively to failure to file a return. In jurisdictions not having a treasurer or commissioner of the revenue, the governing body may delegate to the appropriate local tax officials the responsibility to make the determination of fault. This section shall be the sole authority for local ordinances setting due dates of local taxes and penalty and interest thereon, and shall supersede the provisions of any charter or special act.

FAULT

• WHAT DOES THAT MEAN
• Code of Virginia §58.1-3916 provides few examples:
• death of the taxpayer or a medically determinable physical or mental impairment on

the due date is presumptive proof of lack of fault, provided the taxes are paid within 30 days

• if there is a committee, legal guardian, conservator or other fiduciary handling the

individual's affairs, such return shall be filed or such taxes paid within 120 days after the fiduciary qualifies or begins to act on behalf of the taxpayer.

• Deployed military personnel shall have 90 days to pay from the end of their

deployment.

ATTORNEY GENERAL HAS ALSO OPINED THE STANDARD TO FOLLOW TO DETERMINE FAULT

Did the Taxpayer purposefully fail in their duty to pay the taxes owed?

• OR-

Did the Taxpayer engage in conduct that materially contributed to the failure to pay the tax?

ATTORNEY GENERAL HAS THUS OPINED

• The Attorney General has held that penalty and interest cannot be waived because
• the taxpayer did not know the deadline or misread the deadline on the tax bill (1987-88

Report of Atty. Gen. 559);

• the taxpayer did not receive a bill (1970-71 Report of Atty. Gen. 373);
• the bill was mailed to the wrong address (1981-82 Report of the Atty. Gen. 393);
• the taxpayer thought that the bill was incorrect (1986-87 Report of the Atty. Gen. 321);
• taxpayers have a duty to know tax due dates and to pay on time. If no bill is received,

that duty includes contacting the taxing authority, before the due date, determining what is owed, and paying on time (1981-82 Report of the Atty. Gen. 393).

SO WHAT ARE OTHER REASONS TO REMOVE PENALTY?

Bankruptcy On Time Postmark

• Post Office
• Overnight Carrier
• Electronic Banking

Delivery Error De minimis Amounts

• Not Processed Timely
• Payment Misapplied

Fault of Treasurer

• Failure to Update Address
• RE Ownership Change

Fault of Commissioner of Revenue

§ 58.1-3916. COUNTIES, CITIES AND TOWNS MAY PROVIDE DATES FOR FILING RETURNS, SET PENALTIES, INTEREST, ETC.

Penalty and interest for failure to file a return or to pay a tax shall not be imposed if such failure was not the fault of the taxpayer, or was the fault of the commissioner of revenue or the treasurer, as the case may be. The failure to file a return or to pay a tax due to the death of the taxpayer or a medically determinable physical or mental impairment on the date the return or tax is due shall be presumptive proof of lack

• f fault on the taxpayer's part, provided the return is filed or the taxes are paid within 30 days of the due date; however, if there is a

committee, legal guardian, conservator or other fiduciary handling the individual's affairs, such return shall be filed or such taxes paid within 120 days after the fiduciary qualifies or begins to act on behalf of the taxpayer. Interest on such taxes shall accrue until paid in full. Any such fiduciary shall, on behalf of the taxpayer, by the due date, file any required returns and pay any taxes that come due after the 120-day period.

The treasurer shall make determinations of fault relating exclusively to failure to pay a tax, and the commissioner of the

revenue shall make determinations of fault relating exclusively to failure to file a return. In jurisdictions not having a treasurer or commissioner of the revenue, the governing body may delegate to the appropriate local tax officials the responsibility to make the determination of fault. This section shall be the sole authority for local ordinances setting due dates of local taxes and penalty and interest thereon, and shall supersede the provisions of any charter or special act.

HOW DO YOU DO IT?

• Treasurer Makes Determ ination
• But What if the taxpayer is not happy?
• Can they Challenge the Penalty?
• Right to Appeal to Circuit Court just like a Tax
• Code of Virginia § 58.1-3984
• Under Law Penalty becomes Part of the Tax
• Code of Virginia §58.1-3916
• AG Opinion (1991 Report of the Atty. Gen. 277)

HOW DO YOU DO IT?

• Treasurer Makes Determ ination
• Docum ent Your Decisions
• Keep Records of Penalty Waivers
• Past Violators
• Require written requests for waiver

ADOPT A POLICY

• Preferably in writing
• Apply the Policy

Consistently

• Statutory Basis

FORM: www.taxva.com

• Register with

Government e-mail address

 The Real Bottom Line….  It’s Always Easier to Say “NO”

So let’s see how you put the laws and rules regarding penalty into practice…

SCENARIOS - LAYING DOWN THE RULES

• This is where you really want to be at a table of 6 or more,

ideally 8; so please go ahead and relocate

• You Have a Large White Envelope at

Your Table,

• Please have someone take it in hand
• The person holding the envelope is designated #1
• Go around your table clockwise and assign numbers (up to

8); Some people may have 2 numbers assigned (Lucky you!!!)

• Inside the Envelope are…

SCENARIOS

• More Envelopes

SCENARIOS

• More Envelopes with numbers; Please hand the Inside White Envelope to the

corresponding person at your table with that number; BUT DO NOT OPEN THEM YET

• We are going to be simulating a few scenarios where a taxpayer wishes to dispute the

penalty assessed (and maybe the tax)

• One person at your table will have the treasurer’s role and another will portray the

taxpayer

a Tax Collector

an Actor! Jeff

SCENARIOS - (FACEOFF)

• One person at your table will have the Treasurer’s role and another will portray the taxpayer
• Feel free to stand up; stretch; move around and get in character
• Vocal Warmup: “the tenacious taxpayer tickled the tiny toad”
• We’ll do the basic setup and then have you play out the encounter at your table
• We’ll have some helpful folks roaming the room to help if needed
• SO…
• Actors Number 1 and 2 can now open their envelopes and learn the background; do not share

these with the rest of the table

FIRST PERIOD

1ST PERIOD

ACTORS NUMBER 1 AND 2 CAN NOW OPEN THEIR ENVELOPES You are the Treasurer/Deputy Treasurer of Carla County and it is just past the County’s personal property tax and real estate tax due date (Dec. 5). You are called to the front counter to deal with a citizen objecting to the imposition of penalty. Treasurer: please greet the taxpayer and start your encounter

DEBRIEF

• How did the Treasurer address this Taxpayer?
• What questions were asked?
• How were they handled?
• Was there a meeting of the minds?
• Was there an expression of Empathy?
• Was there Resolution?
• How?

TREASURER TAXPAYER

Your cashier tells you “Mr./Ms. Marple is very upset and doesn’t want to pay penalty claiming they didn’t get the bill in time to pay.” As you make your way to the counter, you prepare to steel yourself to deal with yet another whiny taxpayer. You are told that they have always paid on time in the past. You just got home from your father’s funeral, having spent most of the previous 3 months running back and forth to Florida to arrange for his care. The funeral was on December 4. When you arrived home,

• n December 8, you found your tax bills and realized

that the bills are now late and subject to a 10% penalty. You had called the Treasurers’ Office immediately and was told “there is nothing we can do” and the penalty is required by law. Since you always pay your taxes on time, you grab your bills and head for the County offices to give that there Treasurer a piece of your mind…

SUGGESTIONS

• Did the Treasurer try to rely on the law?
• That there is no authority to waive penalty in this instance?
• Or was the Treasurer sympathetic and exercised Treasurer Discretion
• Past History
• This is one of those scenarios where imposing penalty at a lower rate (at least initially)

would be useful

THESE ARE ONLY MAXIMUMS… BUT YOU CAN IMPOSE PENALTY AT A LESSER RATE

For example-Arlington

• § 20-8. Installment Payments... Any person assessed who fails to pay the tax installments on or

before the respective payment date shall incur a penalty thereon of five percent (5%) or five dollars ($5.00), whichever shall be greater, and, if any tax installment remains unpaid in whole or in part thirty (30) days after the payment date, shall incur an additional penalty of five (5) percent or five dollars ($5.00), whichever shall be greater, but not to exceed the amount of the tax, which shall be added to the amount of taxes due from such person assessed.

AND DON’T FORGET TO LET EVERYONE KNOW…

THESE ARE ONLY MAXIMUMS… BUT YOU CAN IMPOSE PENALTY AT A LESSER RATE

For example-Botetourt

• Sec. 23-2. - Penalty and interest on delinquent real estate and tangible

personal property taxes.

• (a) Any person who shall fail to pay to the county treasurer his annual real estate taxes
• r tangible personal property taxes on or before November fifth of the year for which

the same are assessed shall be assessed by the county treasurer and shall pay, along with such tax, a penalty of two (2) percent if the taxes are paid within thirty (30) days, but if taxes are paid thereafter, the penalty shall be ten (10) percent of the total of such real estate or tangible personal property tax or ten dollars ($10.00), whichever is greater.

SECOND PERIOD

2ND PERIOD

ACTORS NUMBER 3 AND 4 CAN NOW OPEN THEIR ENVELOPES You are the Treasurer/Deputy Treasurer of Carla County and it is a few weeks past the County’s personal property tax due date (December 5). You are called to the front counter to deal with a business that just started operating in your county objecting to the imposition of penalty. Your cashier tells you “they claim to be a different business” and shouldn’t be responsible. Treasurer: please greet the taxpayer and start your encounter

DEBRIEF

• How did the Treasurer address this Taxpayer?
• What questions were asked?
• How were they handled?
• Was there a meeting of the minds?
• Was there an expression of Empathy?
• Was there Resolution?
• How?

TREASURER TAXPAYER

You are called to the front counter to deal with a business that just started operating in your county objecting to the imposition of penalty. Your cashier tells you “they claim to be a different business” and shouldn’t be responsible. After years of dreaming about owning your own business, you finally took the plunge and plopped down all of your savings in late October to buy a café in Carla County after a few months of negotiations. You started a new corporation (New Corp.) and took care of registering the business, getting a business license and setting up to collect meals tax even though you were still operating as the “Café Carla”. You bought the café from the previous owner (CC Inc.) and had a lawyer perform due diligence to ensure that all tax

• bligations were current.

You were shocked, therefore, when you got a notice in the mail that there were delinquent taxes owed. While the notice was in the name of the prior owner’s corporation, it was also addressed to Café Carla. When you called the Treasurer’s

• ffice to tell them about your new business, they told you

that you were responsible. You knew that couldn’t be correct, so you went down to the office.

TREASURER TAXPAYER

You pull up the account for New Corp. and do not see

• anything. You then look up CC, Inc. (the name on the

letter) and see 3 bills assessed against it.

• There is a business personal property bill for 2018

(the current year).

• There are also two meals tax bills for this past

September and October. Those bills were due October 20th and November 20th respectively. You explain the law regarding personal property and advise them that the bill attaches to the equipment they bought from CC Inc. when they purchased the business. You don’t understand how you can be liable for anything. You stated the business in late October and properly registered for all taxes. You collected Meals taxes right away and recently remitted your first payment (on November 18). As far as you are concerned this is just a big misunderstanding. You just want to clear up the

• wnership change and go back to running your business.

And even if we do owe something, how can they penalize me? I just got notice of this and it wasn't even something I was responsible for.

SUGGESTIONS

• This is one of those scenarios where the law imposes an obligation that might seem

unfair.

• How can the Treasurer temper the news that the business may have an obligation?
• Did you ask if there was any remaining monetary obligation between the new and old
• wners?

THIRD PERIOD

3RD PERIOD

ACTORS NUMBER 5 AND 6 CAN NOW OPEN THEIR ENVELOPES You’re the Treasurer/Deputy Treasurer of Carla County and have just sent out a mass amount of personal property tax notices on accounts that are past due. While sitting at your desk on a Wednesday (because these kinds of things always happen on Wednesdays) you hear a taxpayer screaming vulgar language at the cashier station. You can hear the taxpayer claiming that they have never been late in their life and demanding to talk to someone in charge. Treasurer: please greet the taxpayer and start your encounter

DEBRIEF

• How did the Treasurer address this

Taxpayer?

• What questions were asked?
• How were they handled?
• Was there a meeting of the minds?
• Was there an expression of Empathy?
• Was there Resolution?
• How?

TREASURER TAXPAYER

As you approach the taxpayer at the window you can see the taxpayer is really upset (face is red, voice is raised), and he is interrupting everyone in the lobby by yelling. You ask him to please quiet

• down. That just makes it worse.

The cashier shows you that the taxpayer is 2 years delinquent (2017, 2018). I’m trying to run my trucking business of 10 years and things are tight, between gas prices increasing, insurance and keeping up with payroll it has been very difficult because business has been slow. All of this is going on and now the County is charging me an extra $300 for a truck that is sitting in pieces in my yard. This is not fair! I never received a notice on anything! Why should I have to pay taxes on that piece of junk!?! I’m going down there and going to get in the Treasurer’s face, I don’t care if I disrupt their little

• ffice.

TREASURER TAXPAYER

He then starts to tell you what you are going to do and that he is not at fault. He never knew about the taxes and he doesn’t owe them at all. And there is no way I am paying penalty…I never even got a bill. And I’m not stopping there either. This truck is junk. It shouldn’t be taxed. It’s just spare parts.

SUGGESTIONS

• What tools do you have to reduce tensions?
• Do you empathize?
• Repeat the situation back so it is clear you understand
• Rely on the law
• Penalty
• Assessment
• Provide Options
• Appeal?

OVERTIME

SUDDEN DEATH OVERTIME

ACTORS NUMBER 7 AND 8 CAN NOW OPEN THEIR ENVELOPES You’re the Treasurer/Deputy Treasurer of Carla County. A staff member has asked you to talk to a taxpayer. The taxpayer is very upset that their vehicle was seized for taxes and they have to pick up the kids from daycare. Treasurer: please greet the taxpayer and start your encounter

DEBRIEF

• How did the Treasurer address this

Taxpayer?

• What questions were asked?
• How were they handled?
• Was there a meeting of the minds?
• Was there an expression of Empathy?
• Was there Resolution?
• How?

TREASURER TAXPAYER

You look up the accounts and see there are 2 names on the registration. Mr./Ms. Doubtfire and both names are on the bill. You find out the vehicle has been delinquent for 4 years and they have defaulted on a payment plan. You see that there was a payment agreement and

• ne payment was made, then a default.

You tried a bank lien, but no money was in the bank. You also noticed you attempted a bank lien for Mr. Doubtfire at the same bank as Ms. Doubtfire, but no one with that name banks there. Do these people at the county have a heart, are they just money hungry? Don’t they know I’m single with 2 kids and trying to make ends meet? I can barely pay daycare and keep food on the table. Now they have taken my car and I can’t get the kids out of daycare or get them to the doctor if I don’t pay over $800.00 to get my car back. I hope they can help, but I doubt it, they don’t really care. I just don’t know what I’m going to do.

TREASURER TAXPAYER

As you start talking to the taxpayer they appear about to start crying. As the conversation goes on you ask why they didn’t keep up with the payment agreement, and it goes downhill from there. Thanks to my ex who has left me with all this and doesn’t really care about me or the children. If this Treasurer/Deputy questions my morals I am going to scream. All they want is their money. I’m sick of all this and my personal situation is “none of their business”.

SUGGESTIONS

• Husband’s responsibility
• Can Ask
• Where He Works
• Where He Banks
• Treasurer Discretion

SO…WHAT DIDWE LEARN…

• Some of you are really bad actors
• Make sure to LISTEN to taxpayers
• Don’t just hear them…but actively listen
• Understand where they are coming from and their situation
• Do not minimize their feelings/complaint
• Don’t be defensive and take things personally-hear what they have to say
• It’s easy to assume everyone knows the law and rules as well as you do
• BUT THEY DON’T
• Explain things-use handouts
• Avoid “inside” terms and acronyms (SOD, Lien, VRW Stop, AG, etc.)

WHAT DID WE LEARN…

• Make yourself step back
• Speak slowly and calmly and lower your tone
• Give them an opportunity to calm down
• Keep a respectful tone and distance; maintain eye contact
• Don’t interrupt…let them finish
• Don’t be accusatory
• Understand that you are not going to make everyone happy
• BUT you can and should be Respectful and Responsive
• And Patient
• And Calm
• And Understanding
• But know that your job is to collect what is due!!!

WE WANT TO HEAR FROM YOU!!! Jeffrey Scharf jeff@taxva.com 703.425.7751 Gary Sabean gary@taxva.com 703.791.9958

QUESTIONS????