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posted: 3/21/2014 5:30 AM

New law inspiring some taxpayers to come forward

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More than 120,000 homestead exemptions are active in Kane County, but that number might see a significant reduction as new enforcement tools are inspiring unprecedented tax honesty.

More than 700 people came forward in the first two months of the year to surrender homestead exemptions in the county. Supervisor of Assessments Mark Armstrong expects many more thanks to a new law that gives him the power to deliver a financial blow to anyone caught with an illegal exemption.

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State law says Illinois residents can claim only one general homestead exemption for a primary residence. The exemption reduces the amount of property taxes owed by lowering a property's assessed value. This year, the exemption is worth a $6,000 reduction. Until this year, a county property owner with more than one homestead exemption -- even if it was in another state -- broke the law. But Armstrong couldn't do anything other than delete the exemption his office granted.

In fact, there wasn't even a mechanism that allowed a taxpayer to voluntarily refund the ill-gotten tax break.

This year, a change in the state law allows Armstrong to accept that refund.

Even more, the law allows him to place a lien on a property to get the money, plus interest, gained by the illegal exemption.

"As far as going after them, we want to start with education," Armstrong said.

The typical scenario involving illegal multiple exemptions is a legitimate mistake, Armstrong said.

It often happens when someone owns a house that has a legitimate exemption, buys a new home, and decides to rent out the old property.

Often the new home the taxpayer now lives in has an exemption as the new primary residence, but the person forgets to surrender the old exemption.

Red flags are then raised when tax bills go to someone with one name, one mailing address and multiple exemptions.

It's more difficult to catch a tax cheat with multiple mailing addresses, but Armstrong's office has found a fair share of those as well. It's not the type of sleuthing Armstrong likes to devote his staff to.

"We have enough to do that we don't want to sit around going after people," Armstrong said. "But people have really surprised us this year by stepping up on their own and checking themselves to see if they've got an illegal exemption. I'm real pleased with that."

Taxpayers should be pleased as well, Armstrong said.

Multiple illegal exemptions inflate the property tax bills of everyone else.

There are also other exemptions, such as those for seniors and veterans, that Armstrong can now inflict financial punishment for if he finds wrongdoing.

Armstrong had no estimate about how much money might be recovered with the new enforcement powers. Officials in Cook County, however, predicted in promoting the law that their assessor would recover $154 million within the first three years.

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