County Agrees To Pay 30% Commission To Outfit That Hunts For Homeowners Claiming Fraudulent Homestead Property Tax Exemptions

In Forsyth County, Georgia, Forsyth News reports:

• The Forsyth County Tax Assessor’s and Tax Commissioner’s offices are working on a plan to attack fraud. As early as September, a crackdown could begin on residents trying to claim more than one homestead exemption.



• The resulting penalties, interest and back taxes could bring in as much as $3 million, said Mary Kirkpatrick, Forsyth’s chief tax appraiser. Kirkpatrick got the go-ahead Thursday from the Board of Tax Assessors to pursue using Affiliated Computer Services Inc. to handle the fraud search.



• At no cost to the county, the company would produce a complete list of potential dual homestead exemption enrollments using public records. Those records would include, among others, voter registration forms, marriage licenses and name changes. Kirkpatrick said for privacy, only names would be provided to the company, not other information such as Social Security numbers.



• While there is no cost for the list, the company would receive a 30 percent commission of any money collected as a result. "They don’t get paid unless we get paid," Kirkpatrick told the board.

***

• "We just found one on the north end of the county, and the revenue recovered on that one was $62,000 where somebody had been claiming two homesteads right next to each other(1) — one in the wife’s name and one in the husband’s name," Kirkpatrick said. "With back years and penalties and interest, the penalty is stiff. When you get caught … you pay back twice what you would have owed."

For more, see Offices target fraud (Homestead exemptions focus of new crackdown).

(1) Unless there is a specific limitation in Georgia law to the contrary, it is arguable that this couple is limited to claiming the homestead exemption on only one of the two properties where both properties are adjacent to each other.

In Florida, for instance, the state supreme court (in nixing the earlier rulings of a trial court and an intermediate appeals court to the contrary) has made clear that a property owner claiming the homestead exemption on one property can claim a second homestead exemption for property subsequently acquired that is adjacent to the first, provided that the total size of the two properties does not exceed the maximum size allowable by the Florida Constitution (1/2 acre if located within a municipality; 160 acres if located outside a municipality).

See Quigley v. Kennedy & Ely Ins., Inc., 207 So. 2d 431 (Fla. 1968):

• Merely because of the fact the Petitioners did have property of exempt homestead status at the time judgment was awarded against them, did not prevent them from enlarging their homestead holding by the subsequent purchase of the adjacent seven and one-half acre tract. When Petitioners purchased the adjacent vacant seven and one-half acres it eo instanti became a part of the homestead.

***

• In 40 C.J.S. Homesteads, § 56, the text reads in part:
  
  "The amount and extent of the homestead, as fixed by constitution or statute, cannot be exceeded; but a homestead already acquired may be enlarged or increased to the maximum allowed, the addition becoming a part of the homestead * * *"
  
  Petitioners' homestead is now fifteen acres, which is well within the one hundred and sixty acres allowance of the Constitution.
  
  The situation would have been different had the parcel purchased by Petitioners not been contiguous to the seven and one-half acres they already owned as their homestead. See Pasco v. Harley, 73 Fla. 819, 75 So. 30. Also 16 Fla.Jur., Homesteads, §§ 16 and 41.
  
  The suggestion of the District Court that a judgment debtor should be restricted to land he already owns as his homestead to prevent him from depositing his funds or surplus out of the reach of his judgment creditor for the purchase of additional homestead lands appears contrary to the clear intent of the homestead provision of the Constitution.
  
  Furthermore, such suggestion overlooks situations where the acquisition of additional homestead lands may result through the use of borrowed funds or by inheritance or some other manner than that suggested by the District Court.
  
  The certified question is answered by the foregoing and the decision of the District Court is quashed.

-----------------------------

See also: Opinions of the Florida Attorney General:

AGO 2003-08: Homestead exemption on after acquired property:

• In the situation you have described, the property owner owns four contiguous parcels of land upon which are located his residence and buildings and improvements relating to the enjoyment of the home.
  
  Nothing in Article VII, section 6(a), Florida Constitution, or sections 193.155 or 196.031, Florida Statutes, limits the amount of property that may constitute homestead property. However, as provided in Article VII, section 6(d), Florida Constitution, the total exemption on all homestead property owned by an individual taxpayer may only reach $25,000.
  
  Accordingly, I am of the opinion that the Florida Constitution and statutes authorizing a homestead exemption for a "residence and contiguous real property" permit a property owner who is currently receiving a homestead exemption on his or her residence to receive an exemption on adjoining parcels with buildings thereon so long as the property is used principally and in good faith for homestead purposes. The amount of the total homestead tax exemption for all parcels and improvements combined may not exceed $25,000.

AGO 96-79: Homestead exemption, two lots separated by road:

• [I] am of the opinion that the Florida Constitution and statutes authorizing a homestead exemption for a "residence and contiguous real property" permit the owner of a lot in a platted subdivision to include within the homestead exemption a lot that he owns but that is separated from the lot on which his residence is located by a platted public street, provided that title to the land under the roadway in which the public has an easement is held by the owner and not by a third party.

-------------------------

Support for the proposition that, at least in Florida (and probably in some other states), there is nothing necessarily illegal or otherwise improper about a husband and a wife each claiming a homestead exemption on separate residences ('double homesteads'), see:

• Florida Administrative Code Rule 12D-7.007(7):
  
  "A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so. If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each."
• Florida Attorney General Opinion 75 Op. Att'y Gen. 146 (1975), Husband And Wife Maintaining Separate Residences May Both Qualify For Homestead Exemption;
• Florida Attorney General Opinion 05 Op. Att'y Gen. 60 (2005), Homestead Exemption -- separate residences and homestead exemption. Art. VII, s. 6, Fla. Const.
• Wells v. Haldeos, Case No. 2D09-4250 (Fla. App. 2d DCA, October 22, 2010).