Remedies available to delinquent property taxpayers after all

by Andrew Stein May 30, 2013 vtdigger.org Last week, Governor Peter Shumlin said the state does not offer the level of human services that could bail out a delinquent taxpayer like Jeremy Dodge.
But one former and one current member the House Ways and Means Committee said the state does offer ways to help.
Dodge, a high school dropout and ex-convict, racked up more than $17,000 in unpaid taxes and penalties over three years. When his family’s East Montpelier homestead was heading to tax sale, his neighbor, Shumlin, offered to buy the property for less than half of its current appraised value.
Dodge now regrets the decision and says he believes the governor took advantage of him. The governor says he was trying to help out a neighbor and the home’s poor condition requires further investment. For more on this issue, read here.
It appears that of Dodge’s $17,000-plus in back taxes, he could have owed about one-tenth that amount. Dodge said he earns less than $10,000 a year working part-time at a Salvation Army warehouse. At that income level, he is well below the federal poverty line and is eligible for state tax assistance.
Former Rep. Oliver Olsen, R-Jamaica, used Dodge’s 2012 tax bill, which Dodge made public, to calculate how much the low-income man could have saved had he filed a homestead declaration and applied for a property tax adjustment. If Dodge earned $10,000 in 2012, he would have owed $463.26 in taxes that year ‘rather than the $4,597.11, which Shumlin paid, Olsen said.
Olsen said the argument that Dodge didn’t file his homestead declaration by the April 15 deadline is not valid. Vermonters can file until Oct. 15 for a fee of $15.
‘This gentleman asked for help from the highest elected official in the state, an official who clearly understands how these laws work and oversees the tax department,’Olsen said. ‘Rather than try to buy this guy out of his property, the very first response should have been to help the guy, stop the bleeding, file the homestead declaration and then point him in the right direction to abate or address prior years’taxes.’
Tax abatement is left up to the discretion of municipal governments, but is a state option that could have aided Dodge, too, he said.
When the House Ways and Means Committee crafted the policy for ‘extraordinary relief,’Olsen and Rep. Jim Condon, D-Colchester, said the tax committee had Vermonters like Dodge in mind. That policy was recently ushered into law as part of the 2012 miscellaneous tax bill.
The statute allows the state’s taxpayer advocate to recommend extraordinary relief to the tax commissioner, if the taxpayer asks for it.
Before making a recommendation, the advocate must find that Vermont’s tax laws create a ‘significant hardship’or are ‘unfair’to the taxpayer and that the taxpayer has no ‘administrative remedies to correct the issue.’
Olsen and Condon said that if Dodge met the statutory criteria, the commissioner could apply tax assistance to Dodge’s taxes from previous years.
‘It would’ve been up to Mr. Dodge to have someone direct him to contact thetaxpayer advocate so he could explain his situation,’Condon said. ‘Apparently, this guy didn’t have anyone helping him with his taxes, which is a shame. That certainly would have made a big difference in his tax liability.’