Hearing Set In Putnam Property Tax Case
NASHVILLE, Tenn. - A judge has set the first hearing date in one of the largest property tax battles in Tennessee's history.
It follows issues first reported in a NewsChannel 5 investigation into property tax appraisals in Putnam County.
The Tennessee Comptroller of the Treasury determined last year that Putnam County's former property assessor undervalued nearly two hundred properties by more than $82 million over three years.
The comptroller is demanding that the owners of those properties pay years of back taxes and penalties to the county.
But most of the property owners are appealing the comptroller's ruling.
An administrative judge set the first hearing date for January 28, 2014, in Cookeville.
The state hopes to collect property taxes going back three years.
But by law, the only way it can collect taxes that far back is to show that fraud occurred.
Former Putnam County Property Assessor Rhonda Chaffin has maintained she always played by the rules.
NewsChannel5 Investigates asked her last year, "Are you helping people pay less in property taxes?"
"No. That is not even a possibility," Chaffin said.
The comptroller claimed her office excessively depreciated properties in such a way that owners paid less in property taxes.
So far, only four property owners have withdrawn their appeals and agreed to pay the taxes. The rest are fighting.
This week an administrative judge ordered lawyers for both sides to group the appeals into three categories and report back next week.
The judge's order states appeals should be grouped into cases involving alleged fraud or deception by the taxpayer.
Or property allegedly undervalued by a "grossly inadequate" amount so as invoke "presumptive fraud" by the assessor.
Or a third category of properties that were allegedly omitted from the tax rolls.
Our investigation found multi-million dollar apartment complexes that were not even listed on the tax rolls.
NewsChannel5 Investigates asked Chaffin last year, "How are entire apartment complexes not on the tax rolls?"
Chaffin responded, "One problem that we had."
Chaffin claims her office made just one mistake by leaving one apartment complex off the rolls.
But our investigation and the state found others, like an apartment on Hillham Road.
The state valued the complex at $3.5 million, but the owner only paid taxes on the value of the land -- just $300 in 2011.
NewsChannel5 Investigates asked, "What about Hillham Road?"
Chaffin responded, "You think it was done one year. I think it was done another year."
Chaffin said the apartment complex was not finished in 2011, even though NewsChannel5 Investigates found people who said they lived there at the time.
No criminal charges have been filed in this case.
The January hearing only involves whether taxpayers owe money.
It's the fist of many hearings to come.
Putnam County and the City of Cookeville could collect more than $1 million in taxes and penalties.