W. David Zitzkat and Linda Larue, Trustees, Zitzkat Nominee Trust v. Board of Assessors of the Town of Truro (July 25, 2008)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

W. DAVID ZITZKAT AND 	   v.	   BOARD OF ASSESSORS
LINDA LARUE, TRUSTEES,			   OF THE TOWN OF TRURO
ZITZKAT NOMINEE TRUST

Docket No. F282934				   Promulgated:
							   July 25, 2008  	

This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate real estate taxes paid for fiscal year 2005.  
Commissioner Egan heard the appeal.  Chairman Hammond and Commissioners Scharaffa and Rose joined her in the decision for the appellants.
These findings of fact and report are made pursuant to a request by the appellee pursuant to G.L. c. 58A, § 13 and 831 CMR 1.32.

	W. David Zitzkat, pro se, for the appellants.
	
Michael I. Flores, Esq. for the appellee.






FINDINGS OF FACT AND REPORT
On the basis of testimony and exhibits submitted at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2004, the appellants, W. David Zitzkat and Linda Larue, Trustees of the Zitzkat Nominee Trust ("appellants"), were the owners of property located at   574 Shore Road in Truro, Massachusetts ("subject property").  The appellee, the Board of Assessors of the Town of Truro ("assessors") valued the subject property at $899,400 and assessed a tax thereon, at the rate of $4.65 per thousand, in the amount of $4,308.14.  The appellants paid the first half prior to the January 20, 2005 deadline for payment of the bill.  The appellants paid the second half of the tax bill on May 12, 2005, eleven days after the May 1, 2005 deadline.  
On July 6, 2005, the appellee sent the appellants a letter notifying them that they would be receiving a revised tax bill for additional fiscal year 2005 taxes on the subject property.  The appellee contended that a reduction in land value, which it had originally granted in fiscal year 2002, was no longer warranted.  The appellee's determination was based on the following grounds:  
In fiscal 2002 a factor was added to your land assessment to reduce the value by 40%, to allow for the fact that the septic had not been replaced prior to or by the date you purchased the property, Sept. 8, 2000.  Therefore, as of Jan. 1, 2001 . . . we considered your property value to be affected because you could not occupy the property with the cesspool in place.  However, the Board of Health issued to you an extension to occupy the property, while options were pursued to upgrade the cesspool to a new septic.  This means that the 40% reduction was excessive, given that you have had full use of the property for the past couple of years.  Therefore, we have adjusted the reduction to only 5% for fiscal 2005 . . . .

The July 6, 2005 letter further states that "[i]t had been our intention to review this matter prior to the original fiscal 2005 billing in December 2004, but somehow it was overlooked."  The property record cards for fiscal years 2002 through 2005 each contain the notation: "has extensions to occupy prop with cesspool only."  
The assessors issued a revised assessment, purportedly pursuant to G.L. c. 59, § 76, to the appellants on August 3, 2005.  The revised assessment total was $4,308.14, which included $21.59 interest payment for the second half taxes that were overdue.  The appellants timely paid the additional taxes on August 2, 2005.  On August 15, 2005, the appellants timely filed an abatement application with the assessors, requesting abatement of the revised assessment taxes.  On November 21, 2005, the appellee sent to the appellants a notice of abatement determination notifying the appellants that their abatement application had been deemed denied on November 15, 2005.  On February 10, 2006, the appellants seasonably filed their appeal with the Board.  
The assessors filed a Motion to Dismiss, claiming that the appellants did not pay their taxes timely and, therefore, were barred from pursuing their appeal.  However, the evidence reveals that the average of the real estate tax due on the subject property for the preceding three fiscal years was $2,181.91, which is less than the $3,000 threshold under G.L. c. 59, § 64.  Therefore, as will be explained in the following Opinion, the Board denied the motion, and it found and ruled that it had jurisdiction over the instant appeal despite the incurring of interest on the tax due.
The Board found that the assessors failed to show that the subject property had been unintentionally "valued or classified in an incorrect manner" because of a perfunctory "clerical, data processing or other good faith reason," as is required for a revised assessment under G.L. c. 59,     § 76.  Instead, based on the July 6, 2005 letter, the Board found that the assessors had made a reasoned and intentional decision to discount the subject property's assessment since fiscal year 2002, based on what the assessors believed to be occupancy issues affected by the presence of a cesspool.  That the assessors later discovered that an occupancy issue did not exist does not render its original decision unintentional due to a clerical error.  
Moreover, the extension of the appellants' occupancy permit was a fact known to the assessors from fiscal year 2002 through and including fiscal year 2005, as reflected on the property record cards for those years, which each contain the notation: "has extensions to occupy prop with cesspool only."  The Board thus found that the assessors had at their disposal the proper information with which to make an assessment of the subject property but, as stated in the July 6, 2005 letter, they "somehow . . . overlooked" reviewing their previous decision.  
On the basis of these facts, the Board found that the assessors' failure to review their decision prior to the fiscal 2005 billing was not due to a clerical, data processing or similar mechanical error.  Therefore, for the reasons stated more fully in the following Opinion, the Board found that the revised assessment was not issued in accordance with G.L. c. 59, § 76 and was therefore null and void.  Accordingly, the Board issued a decision for the appellants.

OPINION

The Board's jurisdiction to hear this appeal.
The Board's jurisdiction is prescribed by G.L. c. 59, § 64, which provides that "if the tax due for the full fiscal year on a parcel of real estate is more than $3,000, said tax shall not be abated unless the full amount of said tax due has been paid without the incurring of any interest charges on any part of said tax pursuant to section fifty-seven of chapter fifty-nine of the General Laws."  The assessors contended that this provision barred the Board's jurisdiction, because the tax for the fiscal year at issue exceeded $3,000.  However, § 64 goes on to state that,  "for purposes of this section a sum not less than the average of the tax assessed, reduced by abatements, if any, for the three years next preceding the year of assessment may be deemed to be the tax due."  As detailed in the Findings, the average of the tax assessed for fiscal years 2002 through and including 2004 was $2,181.91, which is less than $3,000.  The Board thus ruled that $2,181.91 was "deemed to be the tax due" for purposes of determining the Board's jurisdiction under § 64.  Because this tax amount is less than $3,000, timely payment without the incurrence of interest was not required for the Board to have jurisdiction over the instant appeal.  Accordingly, the Board denied the assessors' Motion to Dismiss, and it found and ruled that it had jurisdiction over the instant appeal.

The validity of the revised assessment issued to the appellants.
 
"The 'right to tax must be found within the letter of the law; it is not to be extended by implication.'"  Commissioner of Revenue v. Destito, 23 Mass. App. Ct. 997 (1987) (quoting Curtis v. Commissioner of Corp. & Tax'n, 340 Mass. 169, 173 (1959)).  With respect to revised assessments, G.L. c. 59, § 76 prescribes that 
[i]f any property subject to taxation has been unintentionally valued or classified in an incorrect manner due to clerical or data processing error or other good faith reason, the assessors shall revise its valuation or classification and shall assess any additional taxes resulting from such revision in the manner and within the time provided by section seventy-five and subject to its provisions.
   
According to the July 6, 2005 letter, the assessors admitted that they had previously made an intentional and reasoned decision to discount the subject property because "we considered your property value to be affected because you could not occupy the property with the cesspool in place."  The assessors then claimed that, once they discovered that the Board of Health had issued an extension to occupy the property, they determined that their previous discount had been "excessive."  
The Board has previously ruled that the assessors may only impose a revised assessment under G.L. c. 59, § 76 when they had previously committed an "unintentional" error in valuing the subject property "because of a clerical or data processing type of mistake."  Mt. Auburn Hospital v. Board of Assessors of the Town of Watertown, Mass. ATB Findings of Fact and Reports 2000-441, 448.  In that appeal, "[t]he Board found and ruled that 'unintentional,' as used in § 76, means 'not done by design' or 'not intended.'"  Id. at 458.  That the assessors later determined that the premise upon which they had based their consistent and continuous discount of the subject property since fiscal year 2002 was faulty does not thus render their original decision "unintentional" because of a clerical or data processing type of mistake.  On the contrary, the Board found that the original fiscal year 2005 valuation represented the continuation of a reasoned decision by the assessors, first made for fiscal year 2002, to reduce the value of the subject property by a certain percentage for conditions which continued to exist at the property as of January 1, 2004.  The assessors made a reasoned judgment based on information which they believed to be true at that time, and therefore, their original assessment was done by design.  The Board thus ruled that the assessors' original valuation, classification and evaluation were not "unintentional" as that term is used in G.L. c. 59, § 76.
Moreover, as explained in the Findings, the extension of the appellants' occupancy permit was a fact known to the assessors from fiscal year 2002 through and including fiscal year 2005.  The Board found and ruled that the assessors' failure to revisit their decision prior to the fiscal year 2005 billing was not the result of a clerical, mechanical or other perfunctory error.     
Changes in judgment cannot be made by means of a revised assessment.  See id. at 448; see also New England Deaconess Association v. Assessors of Concord, Mass. ATB Findings of Fact and Reports, 1997-1063 ("`The assessors cannot simply change their minds about the value or taxable status of the property after the commitment.'")(quoting Department of Revenue Information Guideline Release      90-215).  In the instant appeal, the Board ruled that the assessors did not have the necessary statutory authority under G.L. c. 59, § 76 to issue a valid revised assessment of the subject property for fiscal year 2005.  Accordingly, the Board issued a decision for the appellants.              

   					    THE APPELLATE TAX BOARD


	              By:__________________________________
                        	Thomas W. Hammond, Jr., Chairman




A true copy,



Attest:____________________
	   Clerk of the Board

   Fiscal year		Tax due
$2,065.51
$2,207.51
$2,272.72

Three year average = $2,181.91

ATB 2008 - 957