Cook County Assessor Joe Berrios. File photo | Tom Cruze~Sun-Times
Updated: October 15, 2012 9:49AM
About 1,000 times a year, the Cook County assessor’s office gets a tip saying someone is unfairly lowering his or her property taxes by claiming an unwarranted exemption.
If the tip turns out to be true, the violator is told to pay up, right?
Actually, no. Illinois law doesn’t allow assessors to collect back taxes or to penalize people for improperly claiming exemptions. Those include homestead exemptions on buildings where they don’t live, senior exemptions when they aren’t yet 65 and others. The exemptions lower the final tax bill.
It’s time to change that. If some people are allowed to get away with improperly shaving property bills, the burden to make up that revenue for our schools and roads and the like falls on the rest of us.
In one Cook County case, the owner of numerous rental properties saved himself $89,000 over 10 years by claiming a homestead exemption — which is valid only on your principal residence — on each of those rental properties.
But when those unwarranted exemptions were uncovered, all Cook County Assessor Joseph Berrios’ office could do is start charging the correct amount going forward.
That’s like an invitation to cheat.
Berrios is pushing state legislation that would allow assessors to recoup four years’ worth of unpaid taxes as well as assess a penalty. The bill, patterned after a Florida law, hasn’t made it out of the Legislature over the past couple of years, but it is likely to be reconsidered in the fall veto session.
Berrios spokeswoman Kelley Quinn said the county estimates unwarranted exemptions cost local governments in Cook County — mostly school districts — $65 million a year. That reflects an estimated fraud rate of about 5 percent.
The law is opposed by some statewide groups, including the Illinois Association of Realtors and the Illinois Land Title Association, who worry that people could be penalized for exemptions they didn’t know about.
That can happen for a variety of reasons, including buying a property that already has a senior exemption on it.
“You don’t want people caught up who never had a clue,” said Randy Witter, a lobbyist for the land title association. “You don’t want a system where people are treated as criminals because they didn’t pay close enough attention.”
But state Rep. Barbara Flynn Currie, who sponsored the bill in the House, said it was rewritten to require a minimum of two violations to protect inadvertent violators. Also, there is an appeal process.
“I think we adequately protected against unintentional mistakes,” Currie said.
If more safeguards are needed, they should be added. But this loophole needs to be closed.