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In a little noticed pronouncement, the Los Angeles Board of Supervisors created an entirely new application process for taxpayer advocates. As a result, taxpayers will be punished in the name of good government, especially the taxpayers least able to afford it. The problem is that this process creates a new bureaucracy without getting near solving the perceived problem.
Bruce Bialosky
You may have missed that Los Angeles County had a discernible problem with the person overseeing the collection process for its single largest source of revenue – property taxes. The County Assessor, John Noguez, has been charged with multiple counts of accepting bribes. He and an aide were charged with accepting bribes from a tax consultant, Ramin Salari, that resulted in a cumulative reduction of tax collections for the County of $10 million.
The County Supervisors reacted by first trying to change the law so the assessor position from being one that is elected to being appointed. Their rationale was that because this is an elected position, it was more subject to influence peddling. Did the five omnipotent supervisors ever think of the irony of that position? Their move to co-opt the power to appoint the assessor was put on the November 2012 ballot, but lost as voters came to the conclusion that they were better at appointing (electing) the assessor than the five supervisors.
That did not stop the supervisors. They came to the conclusion that if they got control of the people who consult taxpayers on mitigating their huge property tax bills, they would stop the corruption that had occurred from happening again. Never did they turn an eye to the significant tax bills or how they are determined to improve the process.
They created a new law on April 30th that went into effect on July 1st. That law requires “tax agents,” who represent a taxpayer before a county official, to register with the county. In short anyone who deals with the Assessor’s office or appeals board or any related entity must register. That annual registration comes with a fee of $250. There certainly is no assurance that fee will not climb significantly in the future. For context, this annual fee is more than twice the biannual renewal fee for a CPA license in California.
This fee is not related to any qualifications or any related matter. This fee is a direct reaction to the charged abuse in the Assessor office. What the supervisors have done by imposing this hefty annual fee is restrict the market for potential tax consultants. Many experienced consultants will not want to pay the fee without knowing beforehand that they will get enough business to justify the cost and the paperwork involved. The tax attorney or CPA who has sufficient knowledge to appeal a tax bill, but only occasionally works in this area, frequently will just walk away sending their clients to the reduced universe of registered “tax agents.”
Two things will happen. First, because there is now a restricted market of people who have registered, they will raise their prices charged to taxpayers. This is simply the rule of supply and demand. With less competition they can charge more. Second, those who will register with the county will not only incur the $250, but significant paperwork time as part of this process. The cost of the fee and time will be paid for by someone. It is your guess as to whether with less competition the “tax agents” will eat those costs or pass them on to taxpayers. Both of these factors will drive up the cost to taxpayers causing many of them (especially those with less financial resources) to forego appealing their tax bills. Fewer appeals will derive more revenue for the County. Maybe that is the real aim of this maneuver?
If you are wondering about the paperwork requirements, there will be plenty as another misguided decision was made by the Board of Supervisors. Other than the annual registration, “tax agents” will be required twice a year to file a report listing any political contributions they have made to elected officials or candidates in Los Angeles County. Contributions to the Assessor or a candidate for the office are prohibited.
This is as stupid as stupid can be. Only a fool would make a direct contribution if they wanted to peddle influence. As indicated by the case against the current Assessor the contributions would be made by taxpayers directly. So the “tax agent” will call all of his/her clients and tell them to contribute to Joe for Assessor and then later calls in favors. After all, that is currently what is done with the five supervisors; why would things be any different with the Assessor?
As commonly happens, elected officials have once more come up with a solution to a problem that makes matters worse than before. Because the duly elected County Assessor appears to have been involved in graft, the County Supervisors harm all the innocent parties. In this case, they are not even providing them any new protections — which make matters worse. The only winners here are the new county unionized employees that will work in the office established to handle all this paperwork.