Updates – Vermont Department of Taxes

Homeowners received the Notice of 2011 Property Tax Adjustment calculation letters the week of July 5.

NOTE: It is very important for homeowners to review the information used to calculate their adjustment. While household income can be amended, changes to values for housesite and property taxes, and ownership interest is available only until September 1.

Last week the Department mailed 12,000+ notices to homeowners who filed a 2010 property tax adjustment claim but have not filed a 2011 claim. The law changed where the homestead declaration is no longer required to be filed annually. Filing trends for the claims raised concerns that some homeowners may believe the property tax adjustment claim also did not need to be filed each year. Homeowners who filed a 2010 property tax adjustment claim last year that generated an adjustment but had not yet filed a 2011 claim received the letter. Some of you may have received a letter where their household income is too high this year.

The IRS warns that tax scams are on the increase. The scams include phishing for taxpayer information as well as promoters of filing schemes that charge taxpayers to file returns with the promise of easy refunds. The IRS describes the most prevalent scams in their

And a new scam aimed at tax practitioners - The IRS says it is now finding phishing schemes that preys on tax practitioners who want to attend one of the summer IRS forums. The email supposedly comes from IRS Tax Forums and requests that recipients register for an event for tax professionals by using an attached registration form. IRS makes registration forms available only through the web, not through emails.

Yet another new scam reported. Scammers are sending out emails to employers that report a payment has been rejected by the Electronic Federal Tax Payment System (EFTPS). Clicking on a link downloads malicious software that takes personal and financial information from the computer. IRS never initiates email communications, whether on EFTPS or tax account matters.

It is correct that the extension for the income tax return does not apply to the claim and the last time to file an original 2011 property tax adjustment claim is September 1, 2011. However, household income can be amended for up to three years. Preparers have taken two approaches to determine household income for extended income returns – 1] file the claim with estimated household income using the best information available, or 2] file the claim showing the $97,000 maximum household income.

Remember, that the procedure to file amended household income changed for the 2011 claim. Complete Form HS-145 and check the box on Line 11 to show you are amending the household income. Then complete Schedule HI-144 with the correct information. This can be efiled or filed by paper.

If you mail the original 2011 property tax adjustment claims or amended household income claim, it must be received by the Department within three business days of the deadline. The goal is to get these filings processed so the adjustment amount can be transmitted to the town by September 15. For claims processed after the September 15 transmission, the homeowners receive the check for the adjustment amount.

The Legislature eliminated the requirement to file a homestead declaration each year. The new procedure allows the 2010 homestead declaration to remain on record until the property is sold, or the business or rental use of the property changes from the declaration on record. The following are questions that have been asked about this new process:

If you sell your home and purchase a new home, can you withdraw the declaration on the sold home and declare the new home on the Department's online filing?

YES. Withdraw the homestead sold first. At the end of the withdrawal screen you will be asked if you want to file a declaration for your new homestead. NOTE: You still need to fill in the SSN and Span and name.

Have lawyers, banks and real estate agents been notified of the homestead withdrawal requirement?

YES. The Department sent notification of the change to the Vermont Bar Association and Vermont Association of Realtors in 2010. In May 2011, the Department mailed the guide for property transactions and homestead declarations to Vermont banks, credit unions and licensed realtors. The guide is also located on our website.

Is there delayed processing if a homestead withdrawal was not filed?

The property tax adjustment claim may experience delayed processing as the same SPAN may not be declared by a homeowner with different Social Security number (the Social Security numbers of a joint filing are considered one identification unit). When a withdrawal is not filed, the examiner must research the status of the property through our property transfer return records and/or with the town.

Do multiple or unneeded filings of the homestead declaration cause problems for the Department?

It causes additional work. Declarations filed after the original filings do not automatically post and must be reviewed by an examiner.

What is the process for contiguous land that is part of the homestead (whether in the same or different town) to be classified as homestead?

There is no change to this process. A homestead declaration must be filed for each SPAN in the appropriate town.

If the owner changes from the 2010 declaration, how do you change the owner?

When the home is sold, the seller filed a withdrawal and the buyer files a declaration.
If there is an additional owner being added to the existing owners or an existing owner is removed, file a new declaration.

Do I file a new homestead declaration if the use of my homestead changed after April 1, 2011?
YES. File a new homestead declaration and indicate the date of the change in the section provided on the form. Declarations with use changes after April 1, 2011 will be held and transmitted to the town for the 2012 grand list.
What is the due date for filing a homestead declaration?
The due date remains the same as in the past. A declaration for a new homestead is timely if filed by April 15^th and a late-but-can-still-declare is filed by September 1^st. A declaration to report the change in business or rental use of the property can be filed on the April 15^th/September 1^st schedule. NOTE:
The declaration can be filed earlier at the time of closing or the date of the use change. The Department will hold the declaration and transmit the information to the town for the appropriate grand list.