Proposal would overhaul Michigan tax appeals

LANSING (AP) — Some Michigan officials want state tax appeals to be overhauled, arguing that the current process is too complicated and has inconsistent results.

A draft of potential changes is being circulated by the Michigan Department of Treasury, The Detroit News recently reported .

The proposal would eliminate the Michigan Tax Tribunal that handles assessment appeals from property owners unsatisfied with rulings from local boards.

The state wants to replace the tribunal with a Michigan Tax Court whose judges and magistrates would have more experience and higher pay.

“The compensation for (tribunal) members is significantly below the level of district/circuit court judges, making it difficult to attract the desired caliber of candidates,” the proposal reads.

Legislation is required for the proposed changes to take effect. Treasury spokesman Terry Stanton said officials are receiving feedback on the proposal, which was distributed to attorneys and business leaders. The changes also would create county tax boards to hear appeals.

Stanton said in an email that “dissatisfaction with the current process has been expressed in recent years.”

The administrative court was created in 1974. The agency fielded more than 13,400 appeals last year during its “small claims” process, which generally includes residential appeals but also can include some smaller business disputes. The agency doesn’t track residential appeals.

The tribunal’s chief clerk, Peter Kopke, said the agency is accessible to the public and that its staff is experienced. The tribunal has three judges and 19 referees. The judges generally handle complicated cases involving appeals from businesses, while referees handle residential cases.

“The decisions are fact driven and solely dependent on the evidence,” Kopke wrote in an email. “All hearing referees are hired ... based on their education and experience and receive regular training from or provided by the tribunal.”

Unlike other states, the agency only keeps paper copies of small claims appeals, making it difficult for property owners to research cases.

“It is supposed to be a taxpayer friendly system, not that the taxpayer would win all the time but that they have access,” said Joshua Shillair, an ex-tribunal hearing referee who now files appeals for owners.

The newspaper also said Detroit over-assesses homes by an average of 65 percent, based on an analysis of more than 4,000 appeal decisions over the past three years by a state board.

Jedonna Young said she has repeatedly failed to get the $72,000 estimated value of her 85-year-old mother’s 1,200-square-foot home lowered. Young said at a hearing, she cited several nearby abandoned homes and two recent sales nearby for $20,000 and $16,000.

“If I had the money to hire a lawyer, I would have the money to pay my taxes,” said Young.

City officials say over-assessments aren’t a widespread issue.

“I am fairly confident that we have it mostly right, but I understand why people don’t accept that,” said Detroit assessor Alvin Horhn. “We know that people don’t trust the values out there.”