Transcript Income Requirements [Primary Statutes: G.S. 105

Chapter 14
Compliance Reviews
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Compliance Review Period
• Tax assessors must review at least oneeighth of all properties classified under
PUV annually in order to determine if they
continue to qualify.
– A number of counties with more frequent
reappraisal cycles have chosen to review more
frequently.
– The review period is based on the average of
the preceding three years data.
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Compliance Review Form
• Since a property generally needs to meet the
same
requirements
for
continued
classification as it met for initial
classification, the assessor may ask for
information that is very similar to the
information requested on an initial
application.
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Compliance Review Form
• Technically, the assessor cannot ask for a
new application as part of a compliance
review, but there is nothing wrong with
asking for the same information on a
compliance review form.
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Compliance Review Form
• Types of information that may be requested:
– Sound management plans for forestland.
– Documentation of compliance with any forestry
management practices whose recommended
implementation dates have passed.
– Income info for last three years.
– IRS Schedule F for farm income.
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Compliance Review Form
• Types of information that may be requested:
– Acreage in production broken down by acres per
product.
– Business entity owners—evidence of principal
business. (Including income/expense information).
– Business entity owner—proof of members
participation in farming.
– Proof of sound management.
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Compliance Review Form
• Types of information that may be requested:
– Evidence of compliance with conservation
easements if applicable under G.S. 105277.3(d1).
– Documentation of weather conditions that may
have affected production.
– Assessor may request assistance from the Farm
Service Agency, the Cooperative Extension
Service, the North Carolina Forest Service, and
other similar organizations.
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Compliance Review Process
• There are two types of compliance reviews:
– Assessor determines whether property still
qualifies based upon currently available
information.
– Assessor requests further information
determine whether the property still qualifies.
to
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Determination without Requesting
Additional Information
• Examples where no additional information
may be needed from the property owner:
– Property transferred to non-qualifying owner.
– Field review shows no active production for
several years.
– Due to transfer of portion of property, tract has
fallen below minimum acreage requirement.
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Determination without Requesting
Additional Information
• Notification and appeal procedures:
– Assessor sends notice that tract no longer qualifies.
– Taxpayer has 60 days to appeal to local board.
– Taxpayer has no additional time to submit any
additional info to assessor, only to county board.
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Determination When Additional
Information Is Requested
• Notification and appeal procedures:
– Assessor sends out questionnaire or specific request
for information in order to determine eligibility.
– Owner has 60 days to provide requested info.
– If the assessor requests additional information after
initial information is returned, owner has additional
60 days.
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Determination When Additional
Information Is Requested
• If owner submits information and assessor
determines property is not eligible:
– Property loses PUV classification and deferred
taxes are due and payable.
– Owner has 60 days to appeal to the local board.
– Owner can submit new info only to local board.
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Determination When Additional
Information Is Requested
• If owner has not submitted information and
assessor determines property is not eligible:
– Loses PUV classification and deferred taxes are
due and payable.
– Owner has 60 days from the date of the notice to
appeal to local board.
– However, if owner submits the previously
requested information within 60 days of notice....
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Determination When Additional
Information Is Requested
• If owner submits the previously requested
information within 60 days of notice:
– Assessor must consider the information and render
a new decision.
– Owner then has an additional 60 days to appeal to
local board.
– If the information shows the property is still
eligible, the assessor must reinstate classification to
date when property was taken out and must refund
any deferred taxes that have been paid.
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Refunds Due to Compliance
Review
• Refunds made within the context of G.S.
105-296(j) , compliance reviews, are the
only circumstance where PUV rollback
refunds are specifically authorized under the
Machinery Act.
• Note: Any request made outside of the
context of G.S. 105-296(j), should be
denied if it is not covered under 105-381.
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Compliance Review Examples
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1-Q
• Assessor is conducting compliance reviews
and notices that a tract in forestry PUV has
less than 20 acres in forestry. The owner
owns no other tracts in PUV. The assessor
has not sent a questionnaire to property
owner. The assessor notifies the owner that
the property has been disqualified and the
deferred taxes are billed.
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1-A
• The assessor may disqualify the property without
requesting additional information if the assessor
believes no further information is needed.
• If the owner wishes to submit information, the owner
must appeal the decision of the assessor to the local
board within 60 days and the information can be
submitted with the appeal. Because the assessor never
requested any additional information, the owner does
not have the mandated additional 60 days to provide
the assessor with additional information. The local
board may consider the information as part of the
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appeal.
2-Q
• Assessor is conducting compliance reviews and
sends questionnaires to a number of PUV
properties. Owner returns the completed
questionnaire. The assessor requests additional
information which the owner then provides. The
assessor determines that the property no longer
qualifies. Notice is sent to the owner and deferred
taxes are billed. The owner now wishes to submit
unrequested additional information for the
assessor to consider.
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2-A
• Since the owner has provided the requested
information, the owner must appeal the decision of
the assessor within 60 days. If the owner wishes to
submit unrequested additional information, the
owner does not have the mandated additional 60
days to provide the assessor with additional
information. The local board can consider the
unrequested information as part of the appeal.
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