No Interest, Penalties for Hill’s Homestead Errors

Posted April 10, 2009 at 5:36pm

Clarification Appended

The District of Columbia will not impose interest payments or penalties on a handful of House lawmakers who inadvertently received a property tax break intended for city residents, reducing the one-time corrective bills by a combined $23,000.

A spokeswoman for the D.C. Office of Tax and Revenue confirmed last week that Members will only be required to repay back taxes and not the additional fees.

After a Roll Call review of D.C. property tax records in late March discovered a handful of House Members were improperly enrolled in the D.C. homestead program — which can shave hundreds of dollars a year off tax bills and, more significantly, limit annual tax increases — District officials claimed responsibility, citing a clerical error that resulted in those individuals receiving the tax break despite not having applied for it.

According to publicly available tax records, the District had initially estimated back taxes, interest and, in two cases, penalties for the lawmakers — Reps. Phil Gingrey (R-Ga.), Steve King (R-Iowa), Tom Petri (R-Wis.) and Mike Rogers (R-Ala.) — at a combined $94,400.

Petri, who owns a four-bedroom Georgetown home with his wife, Anne Neal, had been slated to receive a $79,110 tax bill that included penalties and interest, but he will instead be charged $56,970.

King, who owns a one-bedroom Capitol Hill condominium, had been initially listed with more than $800 in taxes and penalties, but he will now be billed $3,496.

Gingrey and Rogers, each of whom own a three-bedroom Capitol Hill home, will also see interest charges dropped from their bills. Neither lawmaker’s home was charged a penalty in previously released public records.

Gingrey will save $43, reducing his tax bill to $4,570. Rogers’ bill has not been updated in public records, but the Alabama lawmaker is listed with $36 in interest charges, which would lower his bill to $6,341.

District officials also confirmed Thursday that Democratic Rep. Betty McCollum (Minn.), who purchased a Dupont Circle condominium in 2003, had received the homestead tax break but had similarly not applied for it.

District officials have previously stated that such mistakes are the likely result of a now-defunct policy of automatically applying the tax benefit to new homeowners based on the tax status of the previous owner.

McCollum will be removed from the program, but tax records have not been updated to reflect how much she will be billed in back taxes. According to tax records, the Minnesotan’s home had been assessed at $253,000 but taxed at only $115,000.

Under the District’s homestead program, a taxpayer who owns a home in the city and uses it as the principal residence receives a reduction of $67,500 on its assessed value, or a savings of $573.75 off the 2009 tax bill.

In addition, properties that qualify for the homestead deduction are also protected from considerable jumps in assessed value. The District caps those increases at 10 percent above the previous year’s tax assessment. Individuals who do not qualify for the homestead program are taxed on the full value of the home.

As of late last week, the tax office had yet to complete its review of the tax status of a three-bedroom Georgetown home owned by Rep. Roy Blunt (R-Mo.).

District records show the home is currently assessed at $1.6 million but taxed at $1.55 million.

According to a recent Kansas City Star report that prompted the District’s review, Blunt and his wife, Abigail Perlman Blunt, had asked D.C. Councilmember Jack Evans to correct the tax status as early as 2004.

A copy of an April 2, 2009, letter written by Evans and provided by Blunt’s office states that Abigail Blunt requested the change at the time she became a Missouri resident.

In addition, Blunt’s office provided a printout of D.C. tax records dated March 23, 2009, showing that Blunt was not receiving the homestead benefit. That record is no longer available from the District’s online tax records, however, because that information was replaced at the start of the current tax year, April 1.

According to the D.C. Board of Elections and Ethics, however, Abigail Blunt is listed as a registered voter at her Georgetown home address. She last voted in the District in November 2002, the office said.

Under D.C. property tax laws, spouses of Members are eligible to claim the homestead deduction, even if the property is co-owned by the lawmaker.

While factors such as income tax and possession of a District driver’s license may be considered in determining whether an individual qualifies for the homestead program, a resident must also be registered to vote in the city under rules enacted in 2002.

Clarification: April 14, 2009

Although the D.C. Board of Elections and Ethics lists Abigail Perlman as an registered voter at her Georgetown home address, she last voted in the District in November 2002.