County changing appraised value on past taxes oil lease

2,672 Views | 22 Replies | Last: 3 yr ago by BoerneGator
TV Casualty
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10:48p, 7/18/22
AG
Land that has some oil wells on it was recently passed to a family member after a death. Taxes were all paid as required over the past years.

A letter came in saying that property taxes weren't paid in full for 2020 and 2021. Past records that we have clearly show that the tax was paid as billed. Comparing the tax bill from past years to the recent letter it appears that they are significantly raising the appraised value for 2020 and 2021.

These taxes were already paid at the lower appraised value that was billed by the county. Can the county really come back later and change the appraised value for 2020 and 2021 and then demand we pay more in past taxes?

This just doesn't seem correct.
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2wealfth Man
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6:22a, 7/19/22
AG
Something is not adding up here:

Two things to be solved: (1) were the taxes paid on the actual finalized assessed values; that can be different from the preliminary estimates. It is strange you haven't been getting notices of back taxes due and threatened legal actions before now? Especially for 2020; (2 ) there is a whole process for determining and certifying fair values on property each year which can not just be randomly changed; are you sure the additional amounts aren't penalties and interest?

What county is this? FYI, Denton County just went through a painful system conversion.
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permabull
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6:39a, 7/19/22
AG
What year did the owner pass away? Were there exemptions on the 2020 and 2021 taxes that the new owners arent eligible for?
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mosdefn14
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In reply to permabull • 7:24a, 7/19/22
AG
hypeiv said:
What year did the owner pass away? Were there exemptions on the 2020 and 2021 taxes that the new owners arent eligible for?
Specifically, did the land have ag exemption that wasn't renewed by new owner?
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Stive
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8:27a, 7/19/22
AG
Or were there improvements (buildings added) made on the property in 2019 or 2020? They usually don't but they're allowed to go back a certain number of years.
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Diggity
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In reply to permabull • 10:23a, 7/19/22
AG
This was my thought as well. Sounds like a claw back.
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permabull
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In reply to Diggity • 10:56a, 7/19/22
AG
I could imagine a scenario where the estate paid the taxes as the bills came in but once the property was re-titled they checked into the tax records since the date of death, that is why I was asking for more clarity from the OP
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TV Casualty
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In reply to 2wealfth Man • 6:41p, 7/19/22
AG
2wealfth Man said:
Something is not adding up here:

Two things to be solved: (1) were the taxes paid on the actual finalized assessed values; that can be different from the preliminary estimates. It is strange you haven't been getting notices of back taxes due and threatened legal actions before now? Especially for 2020; (2 ) there is a whole process for determining and certifying fair values on property each year which can not just be randomly changed; are you sure the additional amounts aren't penalties and interest?

What county is this? FYI, Denton County just went through a painful system conversion.


Amounts are definitely not penalties. The tax was paid on time and in full. This letter tripled the appraised value and then is applying it to 2020 and 2021. The letter says you have to pay all of this by August or you will incur penalties.

It's not Denton. It's a county in west Texas. Talking to someone from Denton it may be something similar. I had no idea they could claim that they hadn't finished their appraisal and then go back 2 years on taxes. The county wasn't very helpful when we called. I now have the number for the tax accessor so maybe they can explain it fully.
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TV Casualty
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In reply to permabull • 6:44p, 7/19/22
AG
hypeiv said:
What year did the owner pass away? Were there exemptions on the 2020 and 2021 taxes that the new owners arent eligible for?


Passed away a few months ago. There were no exemptions as far as I'm aware of. The land was shared with other people as well. They also received a letter raising the appraised value and applying it to past year's taxes. They aren't sure what is going on either.
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TV Casualty
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In reply to Stive • 6:51p, 7/19/22
AG
Stive said:
Or were there improvements (buildings added) made on the property in 2019 or 2020? They usually don't but they're allowed to go back a certain number of years.


No improvements. It's just a dirt patch. Only value is in the mineral rights.

Obviously, the oil wells add to the property value and it's been raised in the past. It's just to see it's appraised value be tripled and applied to past taxes was a shock.
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birdman
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7:08p, 7/19/22
Ag exemptions, buildings have nothing to do with taxes on minerals.
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TV Casualty
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7:26p, 7/19/22
AG
Apparently the county is claiming that they had a bad staff appraiser who undervalued the property in past years. The newly hired appraiser has raised the value and is applying it to past years.

Can they legally do that?
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Stive
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In reply to TV Casualty • 7:31p, 7/19/22
AG
TV Casualty said:
Apparently the county is claiming that they had a bad staff appraiser who undervalued the property in past years. The newly hired appraiser has raised the value and is applying it to past years.

Can they legally do that?

That's what the appraisal district told you? Or that's what you're hearing from other lane owners?
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TV Casualty
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In reply to Stive • 7:35p, 7/19/22
AG
Stive said:
TV Casualty said:
Apparently the county is claiming that they had a bad staff appraiser who undervalued the property in past years. The newly hired appraiser has raised the value and is applying it to past years.

Can they legally do that?

That's what the appraisal district told you? Or that's what you're hearing from other lane owners?


I didn't talk to the appraiser myself. A relative of mine talked to the appraiser and that is what she was told.

I'm hearing everything second hand so I might be missing something. Definitely going to look into it more when I return home and can look at the taxes.
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TxAg20
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7:55p, 7/19/22
AG
Most west Texas counties have a 3rd party mineral appraiser such as Pritchard and Abbott. If it's a low population county, you may be better off talking to the 3rd party appraiser than the elected Tax Assessor/Collector.
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TV Casualty
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In reply to TxAg20 • 9:08p, 7/19/22
AG
TxAg20 said:
Most west Texas counties have a 3rd party mineral appraiser such as Pritchard and Abbott. If it's a low population county, you may be better off talking to the 3rd party appraiser than the elected Tax Assessor/Collector.


Thanks for this. It helped me find some info.

Reeves county brought the appraisals in house for 2020 and 2021. Apparently they really messed them up. So, now they hired Capital Appraiser Group to fix the mess and do the appraisals.

Still don't understand how they can raise the appraisals that much and apply it to past years. It looks like maybe some of the wells were not accounted for or something.
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Bob Knights Liver
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In reply to TV Casualty • 8:15p, 7/20/22
If they did not previously appraise the wells, they may be able to add them to the tax roll now. That's different than appraising them at one value and then in previous years increasing the appraised value. If that's the case you might be hosed.

Were the wells producing by 1/1/2020 and 1/1/2021? Also are they using current pricing in their forecasts or pricing that would have seemed reasonable on those assessment dates?
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TxAg20
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9:52p, 7/20/22
AG
You can talk to someone like DMS & Company or KE Andrews to protest the appraised values. I believe Texas counties can adjust appraisals for some amount of time back, but I have never had it happen to me.
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BenTheGoodAg
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7:00a, 7/21/22
AG
I'm sure there's some hazy legal avenue to support what the county is doing, but that sure doesn't make it right. And I think putting penalties on you if you don't pay in a month for something they messed up years ago sure seems like a scare tactic.

Reminds me of this meme:
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birdman
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7:11a, 7/21/22
You should have said Reeves County at the beginning. It would have been obvious to everyone then. Reeves County is one of most corrupt counties in the state. It's far and away the most incompetent. Those idiots could break an anvil.

Somebody in charge probably decided to fire Pritchett & Abbott. They want to save their fee and skim a portion for themselves. Without a doubt, they completely screwed up the appraisals for two years. Reeves County officials think they could land a 747 because they saw Top Gun twice.

However, there is 100% chance they didn't check to see this is legal. They probably rehired P&A, who calculated the cost of underpayment. Then Reeves County just sends out invoices without explanation or justification. If anybody pays it, they consider it free money. If anybody says no, at least Reeves County tried.

You may end up paying it. But I would make them work real hard for it. They would need to show legal basis to claw back after the fact. Then you can argue that you didn't get a chance to protest. After all of that, if you pay more than 50% of this, you are a chump.
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JDCAG (NOT Colin)
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7:50a, 7/21/22
AG
The ultimate takeaway from this thread should be that you need to consult an attorney. Seems complicated enough that you need somebody representing your interest that knows what is and isn't allowed.
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Chet Ripley
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11:52p, 7/23/22
AG
I'm a little late to the discussion. Capitol Appraisal Group in Austin now has the contract to appraise oil and gas properties for Reeves County. I was at a conference earlier this year, where an appraiser from CAG discussed what was going on. He stated that their intent was only to look for mineral properties that were omitted from the 2020 or 2021 tax rolls. He specifically stated that they did not intend to reappraise properties that were previously assessed, even if they were under-appraised in those years. If you, in fact, have assessments for interests that were previously assessed for those years, I would suggest contacting CAG. If that doesn't help, you can still protest a double assessment to the Appraisal Review Board, even after the additional assessment is certified and tax statements generated.
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BoerneGator
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In reply to TV Casualty • 9:40p, 7/27/22
AG
TV Casualty said:
Stive said:
Or were there improvements (buildings added) made on the property in 2019 or 2020? They usually don't but they're allowed to go back a certain number of years.


No improvements. It's just a dirt patch. Only value is in the mineral rights.

Obviously, the oil wells add to the property value and it's been raised in the past. It's just to see it's appraised value be tripled and applied to past taxes was a shock.
While mineral rights have value, they are not taxed annually by the local taxing entities (county, school district, etc.). As of 1 January each year, the value of producing wells are appraised and taxes assessed on them individually.

Cannot imagine a scenario whereby appraisals can legally be raised retroactively.
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