Boston Tax Appeals: Penalty Claims & Controversy

Boston Faces Scrutiny Over Alleged Tax Penalties for Property Appeals

Boston is facing accusations of unfairly penalizing commercial property owners who challenge their tax assessments, a practice critics say could stifle appeals and exacerbate the city’s ongoing property tax debate. The controversy centers around a recently identified “adjustment” appearing on tax bills, seemingly triggered by pending appeals at the state’s appellate Tax Board (ATB).

A prominent Boston tax lawyer contends that this “hidden penalty” first surfaced in fiscal year 2024 and appears to be unique to Boston. According to a letter sent to state Revenue Commissioner Geoffrey E. Snyder, the Pioneer New England Legal Foundation alleges the city is “secretly penalizing” taxpayers for exercising their right to appeal. The foundation argues that Boston is increasing assessed property values for the following fiscal year solely because of these pending ATB appeals,without providing any prior notice.

“Tax cases take years and years to resolve and you have to pay that tax until you prevail. It’s money out of pocket,” explained a retired bankruptcy court judge, as reported to the editorial board. The financial impact extends beyond property owners,with concerns raised about landlords passing increased costs onto tenants – “even the bagel shop or the dry cleaner on the first floor is paying for this.”

The foundation’s letter asserts that there is no legal basis for imposing such an additional tax. City records indicate that properties at 155 Seaport Blvd.and One Post Office Square have already been subjected to this “adjustment” after appealing to the ATB. Though,a city spokesperson dismissed the allegations as “baseless and full of misinformation,” stating there are no additional charges for having an open case at the ATB.

Did you know?-The Appellate Tax Board (ATB) is a state agency that hears appeals on property tax assessments, and also appeals on other state and local taxes.

The dispute unfolds against a larger backdrop of Mayor Michelle Wu‘s repeated attempts to shift the tax burden from residential to commercial properties,aiming to provide relief to homeowners facing rising rates. This effort failed in the previous legislative session but has been refiled for consideration.

The potential financial implications are meaningful. The Boston Buisness Journal reported that a triumphant appeal for 125 High St., reducing its value by 10%, could result in a $2.2 million refund for 2022 alone. Successful appeals for four downtown office towers – 125 High St., 60 State St., One Federal, and One Lincoln – could lead to even larger refunds. This echoes concerns from the 1979 Tregor decision, where a Supreme Judicial Court ruling of overassessed properties left Boston with a $140 million (approximately $620 million in 2025 dollars) tax refund obligation. City officials maintain that state-mandated cash reserves are in place to prevent a similar financial strain.

Reader question:-How might large tax refunds to commercial properties impact Boston’s budget and services for residents?

currently, 418 properties are under appeal for fiscal year 2024, with roughly a quarter being commercial properties. The city’s response to a request filed by Boston City Councilor Ed Flynn revealed that notations regarding “ATB disputes” have existed for decades, though they might potentially be more frequent this year.

The Pioneer New England legal Foundation has threatened to file a lawsuit if the city or state dose not address the issue within 30 days. Though, pursuing legal action requires property owners to come forward as plaintiffs, a step manny have been hesitant to take, fearing further repercussions from the city.

The situation highlights a growing tension between Boston’s revenue needs and the rights of property owners to challenge assessments. To not recognize the current economic realities, notably the impact of COVID-19 on the commercial real estate market, is a disservice to a vital sector of the city’s economy. Imposing a penalty on those contesting valuations further undermines Boston’s competitiveness.

The Role of the Appellate Tax Board (ATB) in Massachusetts Property Tax Disputes

The controversy surrounding potential tax penalties in Boston shines a light on the crucial role of the Appellate Tax Board (ATB) in Massachusetts property tax matters. As the existing article highlights, the ATB is the state agency where property owners can appeal their tax assessments What is the ATB and what Does it Do?

The ATB is a quasi-judicial body, meaning it operates like a court but isn’t part of the formal court system Filing an Appeal with the ATB

the process of appealing a property tax assessment to the ATB involves several key steps. It’s important to adhere to these steps meticulously. Failing to do so could result in the appeal being dismissed.

1. Initial Assessment: A property owner receives their property tax bill with an assessed value.
2. Local Appeal: The property owner typically first appeals to the local Board of Assessors. This initial step is critically important,as it allows the city or town to review its assessment before a formal state appeal.
3. Filing with the ATB: If the property owner is dissatisfied with the local board’s decision,the next step is to file an appeal with the ATB. strict deadlines apply. Failure to meet these deadlines will result in the appeal being dismissed.
4. Gathering Evidence: The property owner must gather relevant evidence to support their claim. This frequently enough means gathering comparable properties for the appraiser’s review.
5. Hearing and Decision: The ATB will schedule a hearing where both sides present their arguments and evidence. After the hearing, the ATB issues a written decision.

The ATB is an essential recourse for homeowners and commercial property owners who think their property tax assessments are unfair. The ATB provides an autonomous review process to ensure fair and accurate tax valuations.

Property owners should consider hiring a professional, like a tax lawyer, or a property tax assessment appeal company to assist with this process, as it can be complex. [[1]].

Common Mistakes to Avoid

Successfully navigating an appeal to the ATB demands attention to detail, and many property owners make mistakes that can hinder their case.Here are some common pitfalls to avoid from [[1]]:

• Missing Deadlines: The most common mistake is missing the filing deadlines. These deadlines are strict, and missing them generally means the appeal is dismissed.
• Insufficient Evidence: Failing to provide adequate documentation and evidence to support the claim is another major issue. This includes comparable property sales,photos of property defects,and other relevant data.
• Lack of Planning: Not thoroughly preparing for the hearing can be detrimental. This means understanding the arguments for the city and formulating a strong case and response.

The Larger Context: Property Tax Law in Massachusetts

Massachusetts property tax law can be complex, and the process of appealing an assessment can be convoluted. The current situation in Boston is simply added to the complexity of property taxes in the state.

Given the complexity of property tax appeals, it’s frequently enough wise to seek counsel from a firm specializing in this area [[3]]. Consulting with a lawyer experienced in Massachusetts property tax law and property tax appeals can definitely help navigate the intricacies of the process. The impact of the ATB’s decisions can reverberate throughout the city’s budget, potentially impacting residents and the fairness of the tax system.

FAQs

Here are some frequently asked questions about property tax appeals in Massachusetts and the ATB:

Q: how long does the ATB appeal process take?

A: The ATB appeal process can take several months, sometimes years, to resolve, depending on factors like the complexity of the case and the ATB’s caseload, as stated in the original article.

Q: What if I disagree with the ATB’s decision?

A: You can appeal the ATB’s decision to the Massachusetts Appeals Court or the Massachusetts Supreme Judicial Court.

Q: What kind of evidence is helpful for property tax appeals?

A: Comparable sales data, professional appraisals, and documentation of property defects are all helpful to support your case.

Q: Can I represent myself at an ATB hearing?

A: Yes, you can represent yourself, but it is indeed always wise to get advice from a tax attorney.