We’re from the government and we’re here to help.

by Chris on February 10, 2012

The bane of a tax buyer’s existence is sometimes the taxing authority itself. Anywhere from a dual or bad assessment to a bad notice by the sheriff can result in losses. Losses can also arise by actions of the Louisiana Tax Commission (LTC) itself. The LTC is a very powerful organization. It is an agency of the State of Louisiana, and like any other agency it acts as legislature, judiciary, and executive branches within itself. Louisiana Revised Statute 39:351 grants the LTC authority to “cancel erroneous assessments.” What is an erroneous assessment? If you try to find out you will likely come across this case where the assessor requested cancellation of an assessment from the LTC, which then canceled the tax sale without notice to the tax buyer, and without allowing the opportunity for the tax buyer to be heard before its ownership was terminated.

Essentially, the LTC acts as a judiciary under Louisiana Revised Statute 39:351. This statute allows the LTC to cancel an assessment when “upon determination” the LTC notifies the local tax collector of the “correction” who then “shall authorize and direct the recorder of mortgages of the appropriate parish or parishes to change the inscription of the tax mortgage.” The language “upon determination” is over broad, and gives the LTC almost unlimited discretion for interpreting when it can apply this law. There is no case law, procedure, or guideline that the LTC has to inform the public of what exactly is the requirement for determining an “erroneous” assessment, thereby undertaking the role of judiciary to interpret the statute as the LTC deems necessary. The LTC acts as a executive branch, since the statute permits the LTC to order the tax collector authority to direct the recorder of mortgages to change the inscription of the tax mortgage.

Another authority which the LTC relies upon is Louisiana Revised Statute 47:1991. Again, this calls for cancellation of dual or “erroneous” assessments. It does require the LTC to first obtain a statement under oath which is verified and authorized by the Assessor of the Parish where the cancellation is to occur. The tax payer must provide an affidavit to accompany the explanation of the clerical error or state in detail why the assessment is erroneous. Again, the LTC uses judiciary powers to determine what is sufficient information to fulfill the requirements of Louisiana Revised Statute 47:1991. It then acts as an executive power to order the recorder of mortgages to cancel the inscription from its records.

Under both of the aforementioned statutes the LTC undertakes the role of a judiciary, by deciding what facts are sufficient to meet the requirements of the overly broad language. It then uses its executive power to carry out cancellation of assessments or inscriptions. This is a serious problem because neither statute allows for actual erasure or cancellation of a tax sale deed or certificate, only for cancellation of mortgage inscriptions. But tax sales or tax certificates are not inscriptions recorded in the mortgage records‑they are recorded in conveyance records. Thus, complying with these statutes is factually and legally impossible. Yet, they are statutes that the LTC consistently relies upon for canceling or “correcting” assessments. Essentially, the tax buyer has no notice rights before a sale is cancelled, and there is no opportunity to object or present evidence to the contrary. Documented cases where the LTC acted under this authority are absent of any oath, affidavit, or explanation of why the assessment merit cancellation and devoid of any opportunity to be heard by the tax buyer.

The LTC has undertaken a legislative function with the creation of online change order forms. The LTC’s practice of canceling assessments upon request by an Assessor’s is widespread. It has become so commonplace that the LTC website actually has a menu on the sidebar for “change orders” where Assessors can create an account, log in, and request cancellation or “correction” of assessments in batches. The LTC even provides a form on how to manage change orders and promulgated its own rules on the policies and procedures for assessments and change order practices. The promulgation of such rules reinforces the LTC’s legislative power to enact its own internal procedures. It is also suggested that allowing change orders and corrections to be requested via online services eliminates the ability of the LTC to confirm the veracity of requests, which in turn leads to speedy cancellations that omit entirely the right of a tax buyer to submit its evidence as to why these tax sales and assessments are do not warrant cancellation or erasure.

Ultimately, the LTC has broad authority to interpret and execute the provisions of Louisiana Revised Statutes 47:1991 and 39:351. It has taken the additional function of legislators to enact rules governing cancellations and corrections, and unlawfully delegating judicial authority to local Assessors. Assessors now submit change orders through an online service, often time in batches of up to fifty properties. There is no verification process, and there is no auditing done to confirm the veracity of the Assessor’s requests. In the end, the LTC has carte blanche when it comes to cancellation of tax sales.

 

 

 

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