How suburban assessors discovered hundreds of illegal exemptions
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Before she took over as Grant Township assessor in 2010, Jeri Barr was already uncovering property tax shenanigans.
Digging up properties with illegal tax exemptions was one of her campaign issues, and they were easy to find.
"When we started, my husband and I just looked for (owners') mailing addresses that didn't match the property being taxed," Barr said. "That was the easiest way to find someone getting multiple homestead exemptions, and there were a lot."
In the first year on the job, Barr and her staff removed the annually recurring exemption from nearly 400 homes and returned more than $2 million of residential property values to the tax rolls. That has the potential to reduce taxes for everyone else.
On average, the property owners improperly receiving the exemption were saving about $450 each on their property tax bills in Grant Township, Barr estimated.
"That's money that everyone else is having to pay," Barr said.
By 2015, Grant Township had the lowest percentage of homestead exemptions among 50 suburban townships in six counties, at just 70 percent of eligible properties, according to a Daily Herald analysis of property tax records. The most current exemption records available for all counties was 2015.
Homeowners receive the exemption if the property is their primary residence, so nobody gets an exemption on more than one property. It works by reducing the assessed value of a residential property by $6,000. It's a $7,000 exemption in Cook County because the county assessment formula is different from other counties'.
Combined, 850,425 homestead exemptions were granted to the 1,019,006 eligible properties in the 50 townships in 2015 -- or 83.5 percent of the homes, according to the analysis. In contrast, more than 90 percent of the eligible residential properties receive a homestead exemption in seven of the nine DuPage County townships.
"We are pretty stringent about making sure that those receiving the exemption are eligible," said Michael Musson, assessor of Wayne Township, where 95.1 percent of the eligible residential properties receive the tax break, the highest percentage in the analysis. "I do have a staff member who verifies the exemption and we do a lot of investigating to ensure everything is valid."
When fraud is suspected, Musson and many other township assessors have staff members visit homes to see if the owner is living there. They'll also investigate utility billing records, check home sales information and compare details of real estate listings for rental homes.
Musson said his township's homestead exemption rate is so high because there are few rental properties in Wayne Township and people are actually living in the homes they own.
Barr said many of the residential properties in Lake County's Grant Township are summer homes or rental properties, which is why it was so easy to find so many invalid exemptions there. But she argued many of her colleagues aren't doing as much as they can to find improper exemptions.
Barr said it's not hard to find properties that aren't entitled to the exemption. During a meeting at her office near Ingleside recently, Barr pulled up tax records she had found that morning showing someone getting homestead exemptions simultaneously in both Antioch and Cuba townships.
"It's pretty easy," she said.
There is no statewide resource assessors can use to check the validity of homestead exemption requests. However, a state law passed in 2013 created penalties for homeowners who receive multiple exemptions and allows governments to recoup tax dollars that were abated because of the exemption. It does not provide any relief for taxpayers who were overtaxed because of the invalid exemption.
Townships in Northwest suburban Cook County averaged about 75 percent of the eligible residential parcels receiving the homestead exemption in 2015. County assessment officials chalked that up to a higher number of rental properties than in some other suburbs, as well as increased enforcement. Residential property classification is also slightly different from that in other counties because of state law.
Cook County Assessor Joe Berrios created the Erroneous Exemptions Unit in the wake of the 2013 legislation to crack down on illegal exemptions. His office reported in March that more than $22.5 million has been collected and another $19.4 million is "being pursued" by the office from property owners who received exemptions they weren't entitled to.
The cost of operating the unit is paid through funds accumulated by finding invalid exemptions, officials said. In 2015 alone, 9,711 Cook County residential properties had homestead exemptions revoked, according to Berrios' office.
Not only are homeowners not supposed to have multiple homestead exemptions in Illinois, but they can't claim another homestead exemption in another state.
Barr said she frequently found homeowners with an exemption in Grant Township and another in Florida, where the exemption is usually much more lucrative and the penalty for getting caught with multiple exemptions much harsher. Florida law allows governments to go after 10 years of back taxes, plus a 50 percent penalty and 15 percent interest on the unpaid bill. There's also the possibility of jail time, according to the state law.
"Yeah, no one's going to jail for that here," Barr said.
Meanwhile, Barr and her team aren't finding nearly as many homestead exemption violations as they used to, but it still happens. County property exemption records show there were 108 fewer homestead exemptions issued in Grant Township in 2016 than in the previous year.
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