Tarrant County taxpayers due millions in property tax refunds

Tarrant County taxpayers are due a surprise windfall of more than $12 million in property tax refunds because of what some officials believe were software errors and delays.

This sudden news has left tax officials scrambling, since it comes at the end of a tax year, a time the county isn’t flush with tax dollars.

The only way officials can find the money to process these refunds is to stop planned tax payments to all entities in the county — cities, school districts and even the county — according to a letter recently sent out by Tarrant County Tax Assessor-Collector Ron Wright.

“It is the first time in the history of Tarrant County that a tax assessor has had to turn off the spigot,” Wright said. “It was hard to do, but it’s necessary.”

Many questions remain, including, who gets the refunds and what you have to do to be sure you get what you’re owed.

County officials say they are beginning to work through the list of people due the refunds, and do not have a list of names to share publicly. Anyone who wants to know if they are due a refund can call the Tax Assessor-Collector's office at 817-884-1100 and workers can look up whether that property owner is owed a refund. Or, officials said, taxpayers can wait to see if they get a refund in the mail.

County officials chalk the problems up to the Tarrant Appraisal District’s software problems, which were criticized by state officials in recent months.

TAD generally sends supplemental rolls with changes to the tax assessor-collector’s office every month, indicating changes ranging from different owners to increased value.

In a typical month, the county receives changes on around a few thousand accounts.

But the tax assessor-collector’s office recently received more than 80,000 changes that will lead to more than 5,000 refunds for changes in the past few years. That’s in addition to more than $3 million the office was already processing for other changes in supplemental rolls.

TAD Chief Appraiser Jeff Law said the refunds are not related to a TAD software problem.

“We handle these types of changes, which may cause either a refund or supplemental tax bills, all throughout the year and have done so for years,” he said in a written statement. “The only difference is the timing of the refunds this year as compared to other years.

“The volume of 2016 exemption application this year were higher than in previous years. In addition, the volume of protest before the appraisal review board were higher this year as well.”

Wright said he’s trying to find the money to pay the refunds to taxpayers in the 60 day period required by law. If it takes longer than that to pay back the money, then the tax assessor-collector’s office would owe those taxpayers the payment plus interest.

“The refunds have to come first,” he said. “That’s the people’s money. We legally owe it to them.

“It was a kick in the pants for this to happen at this time of the year.”

Terry Hanson, Fort Worth’s budget director, said the city is still waiting for some additional information from the county, but said the city will be able to pay its bills. At this point, Fort Worth has received $950,000 above what’s budgeted from property taxes, he said.

“We’re in a favorable position to start off with,” Hanson said. “It’s not a very detrimental impact. On its face value, we should be in pretty decent shape.”

‘Serious situation’

This issue arose publicly recently, when Tarrant County Auditor Renee Tidwell updated county commissioners on what she believes is “a very serious situation that could have ramifications for several years.”

TAD officials have been criticized about a variety of issues, but most recently were grilled in April by a panel of state lawmakers about software problems that left millions of dollars in property off the books last year.

Law apologized for problems related to a software conversion at TAD that went into effect in 2014.

He has been questioned about everything from a a contentious protest deadline to a lawsuit that limited the amount of appraisal data available to the public — and general failures of the appraisal software.

Some officials have said TADs software simply “doesn’t work” and that TAD’s system is “adversarial to the public.”

But Law said these refunds are coming from a normal and regular process.

“The appraisal district processes thousands of homestead exemption applications every year. The law allows a property owner to apply for a homestead exemption in the current year and, if they qualify, they may be entitled to an exemption and refund for the previous year,” he said.

“Approximately 30 percent of these refunds are for exemptions granted, based on state law, for the 2015 tax year. These applications were received and processed during the 2016 tax year,” he said. “Approximately 30 percent of the total refund amount is for accounts in which lawsuit settlement agreements were reached on values for prior years.”

He said taxpayers generally pay the full amount of their tax bill and if a final settlement is reached, they are due a refund.

“We receive around 500 lawsuit(s) per year and it is not uncommon for us to have this type of settlement during this time of year,” Law said.

Tidwell said the recent news about unexpected refunds to property owners “certainly has made estimating revenue this year a challenge.”

Refunds coming

Officials say the biggest concern is that problems keep occurring.

“Previous bills and information in the system were incorrect,” Tidwell told commissioners. “And that continues to be an ongoing situation.”

As a result, refunds that will be sent out aren’t just from this year, but for recent years as well.

She said there are big concerns because “the numbers are just all over the place from time to time and of course that’s a concern.”

“The public needs to understand that, at some time, there will be an accounting of this.”

County officials are clearly among those frustrated with continuing problems.

“These problems … erode public trust in our system,” Commissioner Andy Nguyen said after the briefing. “These problems didn’t just occur this year. They occurred last year and the year before and the year before. Is there any recourse?”

The next round of tax bills will be sent out Oct. 1 and are expected to quickly generate needed tax dollars.

Wright said he believes these refunds will be paid in the coming weeks. His email indicated that he believes regular tax distributions will “resume before the Oct. 19 deadline for refund payments.”

Staff writer Sandra Baker contributed to this report, which includes material from the Star-Telegram archives.

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This story was originally published August 30, 2016 at 6:17 PM with the headline "Tarrant County taxpayers due millions in property tax refunds."