|Legal Opinion: |
Text of Document: April 9, 2007
Dear City Administrator:
You have the following question: What is the statute of limitations on a clerical error in the office of the county property tax assessor that saw a piece of property within the City left off the city’s property tax rolls? As I understand the facts, a change in both the location of the business within the city, and a change of ownership of the business, occurred about six years ago (2000–2001), and in the process of those changes the county property tax assessor keyed the piece of property onto the county’s property tax rolls, but did not key the piece of property onto the city’s tax rolls.
The answer appears to be governed by Tenn. Code Ann. § 67-5-509, which is entitled Errors–Correction of Assessments. Under that statute the property owner would owe the taxes for the current year and two back years.
Tenn. Code Ann. § 67-5-509 provides that:
(c)(1) Whenever the assessor shall discover, or it has been called to such assessor’s attention, that there has been an error or omission in the listing, description, classification or assessed value of property or any other error or omission in the tax rolls held by the trustee or municipal collector, the assessor shall certify the facts to the trustee or municipal collector, who shall receive the tax on the corrected assessment and report the difference in the trustee’s or municipal collector’s errors and releasement list, and shall make such other corrections as such certificate may show right and proper.
(2) the assessor shall certify to the trustee or municipal collector the facts and the reasons for such a change in such assessment, and the tax shall be collected upon the revised assessment.
(d) Correction of assessments pursuant to this section must be requested by the taxpayer, or initiated by the assessor, prior to March 1, no more than the second year following the tax year for which the correction is to be made. Additional taxes due as the result of a corrected assessment shall not be deemed delinquent until sixty (60) days after the date notice of the corrected assessment is sent to the taxpayer. Once a suit has been filed for the collection of delinquent taxes pursuant to § 67-5-2405, the assessment and levy for all county, municipal and other property tax purposes are deemed to be valid and are not subject to correction under this section. [Emphasis added by me.]
(f) Errors or omissions correctable under this section include only obvious clerical mistakes, involving no judgment or of discretion by the assessor, name or address of an owner, the location or physical description of property, misplacement of a decimal point or mathematical calculation, errors of classification, and duplicate assessments. Errors or omissions correctable under this section do not include clerical mistakes in tax reports or schedules filed by a taxpayer with the assessor.
Subsection (f) is the product of Public Acts 1990, Chapter 898, § 2, the preface of which declared:
WHEREAS, Tennessee Code Annotated, Section 67-5-509, has been judicially interpreted that corrections of errors or omissions are limited to those errors or omissions that are “housekeeping”; and
WHEREAS, the Attorney General and Reporter has opined that only errors which are ascertainable on their face may be corrected;....
I am not sure to what case the first WHEREAS has reference, but the second WHEREAS apparently has reference to Tennessee Attorney General’s Opinion dated June 25, 1976 to the Williamson County Attorney, and to 87-90, dated May 14, 1987. Whatever the precise references there, it appears clear that the intent of Public Acts 1990, Chapter 898, with respect to assessment mistakes was to limit them to “housekeeping errors.” The mistake at issue in your City is a simple information keying error, which appears to qualify as an “obvious clerical mistake, involving no judgment or discretion by the assessor...,” under Tenn. Code Ann. § 65-5-509(f).
Surprisingly, there are few cases in which Tenn. Code Ann. § 67-5-509 has been an issue, and only one unreported case involves the question of what kind of error constitutes a clerical error within the meaning of that statute: Metropolitan Government of Nashville and Davidson County v. Delinquent Taxpayers, 2005 WL 737126 (Tenn. Ct. App). Unreported cases do not have the precedential authority of reported cases, but that one is all we have. There the defendant-taxpayer argued that the property assessor’s mistake was one of classification and was not covered by Tenn. Code Ann. § 67-5-509. The Court agreed, and reasoned that:
We tend to agree that the Assessor’s mistake here was the result of an error in judgment and discretion and not a product of a clerical blunder. [Citation omitted.] Although the mistake at issue was an “error[ ] of classification,” we believe that it was not one that would be apparent from the face of the official tax and assessment records...”[Citation omitted.] When the Assessor made the decision to remove greenbelt status from the entire parcel, he was making a decision based upon information that, in his discretion, warranted such a classification. This type of action, we believe, does not fall under section 67-5-509 and is not comparable with the types of envisioned errors correctable under that section, such an incorrect “name or address of an owner” or the “misplacement of a decimal point or mathematical miscalculation.” [Citation omitted.]
At first glance, Tenn. Code Ann. § 67-5-509 appears to apply only to complaints in assessment errors by taxpayers. However, Tennessee Attorney General’s Opinion 87-90 opines that that statute also applies to complaints of assessment errors by taxing jurisdictions. That statute has been changed several times since 1987, including the addition by Public Acts 1992, Chapter 996, of the precise time limitation on when the correction to the assessment can be made contained in subsection (d), but none of those changes appear that they would change the Attorney General’s answer.
It appears peculiar to me that Tenn. Code Ann. § 67-5-1806 contains a ten-year statute of limitations on delinquent property taxes, but that a clerical error in the assessment process operates as a much shorter statute of limitations. It was even said in M’Carrol’s Lessee v Weeks, 5 Tenn. 246 (Tenn. 1814), that the obligation to pay taxes does not depend upon the notice to pay those taxes:
The law requires that every individual owning land within the State should pay the taxes on it; every proprietor is presumed to know that law, and that he should pay without demand or personal notice. In fiscal arrangements, the promulgation of the law is equivalent to the common-law idea of notice.... [At 254]
Of course, Tenn. Code Ann. § 67-5-1806 and M’Carrol’s Lessee, above, are predicated on the failure of a property owner to pay taxes where such taxes are already levied, while in your City’s case, the problem is that due to a clerical error, the property in question was not even assessed for city taxes. Still, it remains peculiar to me that a person is not presumed to know that if he owns property inside that city that it is subject to assessment for city taxes the same as is every other piece of property in the city, and that a person can escape such taxes through an error that omitted his property from the assessment rolls. But that peculiarity appears to be enshrined in the law.
I have looked in vain for any statute or legal doctrine that would change the answer.
Sidney D. Hemsley
Senior Law Consultant