The filing of false property tax returns, and the difficulty of investigating false claims using existing laws and regulations are the subject of a report released by a New York State Supreme Court Grand Jury.
The report recommended legislative, executive, and administrative reforms to the New York City tax system so as to lawfully maximize tax receipts.
“As the city’s single largest revenue source, the importance of real property tax to the financial well-being of New York cannot be overstated,” Manhattan District Attorney Cyrus Vance Jr. said in a release Wednesday.
According to the report, 60 percent of property owners surveyed failed to report income derived from signs posted on their properties to the Tax Commission. Owners of properties worth over $40,000 are required to file statements with the government. Real property taxes are levied on more than 1 million properties each year.
The grand jury made seven recommendations to streamline the system to prevent these cases from happening, whether by error or intent.
First, to implement an earlier deadline for tax-related filings, as the current deadline for the real property tax filings in September does not allow the Department of Finance enough time to thoroughly examine the reports. Mayor Michael Bloomberg had requested city council implement this, and the council recently introduced legislation to this effect.
The grand jury also suggested these reports be notarized, and property owners should be required to swear to the validity of the filings. The city council has introduced legislation to implement this as well.
Property owners who currently fail to file real property income and expense (RPIE) statements are subject to civil sanctions by the Department of Finance. The jury recommended this be extended to filers of false information as well.
The grand jury recommended the Tax Commission be authorized to assess and sanction owners who file intentionally false information as well.
Real property tax data is currently available to other agencies, but difficult to access and search through, the report said. The grand jury recommended the Mayor’s Office of Policy and Strategic Planning revamp the system for better record sharing between the Department of Finance and the Tax Commission.
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