Tax Court reverses for Indy law firm in taxpayer refund dispute

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An Indianapolis law firm has secured a reversal from the Indiana Tax Court after the Indiana Board of Tax Review was found to have erred in declining to accept as true factual allegations that the firm was the taxpayer who paid property taxes on property it purchased.

During the 2014 through 2017 tax years, Paul Terry Batties owned a single-family residence home in Lawrence Township and entered into a residential mortgage loan transaction with Green Tree Servicing LLC. An escrow account was established from which the property taxes were to be paid, but Batties became delinquent on the loan during the years at issue.

Without reason, the property’s homestead deduction was removed even though the property had received the deduction in preceding years.

When Green Tree eventually filed a complaint to foreclose the home, Gilday & Associates P.C. purchased the property at a sheriff’s sale in July 2018 for $375,000, which included the amount of Green Tree’s mortgage foreclosure judgment of $280,467.86.

Gilday, which believed it had paid all the property taxes for the years at issue by virtue of its payment to the Marion County sheriff, filed four notices to initiate an appeal with the Marion County assessor in November 2018.

Although the law firm claimed it was entitled to a partial refund of its property tax payments because the property should have received homestead deductions during the years at issue, the assessor denied all of its forms.

Gilday later asserted in response to the Indiana board’s sua sponte motion that because it was bound by the Indiana Trial Rule 12(B)(6) standard, it must accept as true the factual allegations in its Form 131s that it was the taxpayer that paid the property taxes for the years at issue by virtue of paying Green Tree’s judgment at the sheriff’s sale.

The assessor disagreed and so did the Indiana board, which explained that it did not need to accept as true the factual allegation that Gilday was the taxpayer that paid the property taxes on the subject property because “[t]he question of whether Gilday [was] a taxpayer within the meaning of the appeal statutes [was] a mixed question of fact and law.”

It further found that neither Indiana Code § 6-1.1-15-1.1 nor § 6-1.1-26-1.1 authorized Gilday’s appeals to the Indiana board as he had alleged.

But the Indiana Tax Court reversed Wednesday, concluding that the assessor proposed its standard for analyzing mixed questions of law and fact during the administrative proceedings, “but neither then nor now has he identified any legal authority in support of this novel claim.”

The court found Gilday’s third factual allegation — that it was the “taxpayer” that had paid the overstated property taxes — taken as true, was sufficient to show that Gilday is the taxpayer authorized to pursue the refund claim.

“Consequently, the Indiana Board erred by dismissing Gilday’s administrative appeals for lack of standing to claim a property tax refund for the years at issue,” Judge Martha Blood Wentworth wrote.

The case of Gilday & Associates, P.C. v. Marion County Assessor, 21T-TA-2, was remanded to the Indiana board to resolve the assessor’s motion to dismiss and, if necessary, the parties’ pending discovery motions.

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