New Jersey Tax Appeals: Overcoming the Presumption of Correctness

We are frequently asked questions regarding the necessity of the appraiser at the tax appeal hearing. For owners of more moderately priced properties, the decision is not an easy one to make. Very often, taxpayers conclude that the cost of an appraisal may exceed the savings that will be derived from the tax appeal. For the first time, this year, several dozen taxpayers asked us to file their appeals without appraisals.

The disadvantages of failing to obtain an appraisal are twofold. Primarily, we will focus on the role of the appraisal during the tax appeal hearing. At the hearing, the taxpayer has the burden of proving that the assessment is too high, while the municipality, on the other hand, is afforded the presumption of correctness. Put simply, the municipality does not need to prove anything. Consequently, for hearings at the county level, the municipality generally does not produce a full appraisal, but rather a list of comparable sales that will be relied upon. In some cases, the municipality will not produce any proof at all in support of its assessment and simply argue that the taxpayer has not satisfied his burden to prove that assessment wrong. Absent a well-prepared appraisal and expert testimony, it is nearly impossible for the taxpayer to satisfy his or her burden of proof.

To illustrate how this works, we will look at the matter of Greenblatt v. Englewood City. We previously reported on the case with regard to the use of “unusable sales.” In Greenblatt, the Court also visited the issue of whose duty it was to put forth credible evidence. The Court, in that matter, remarked that neither the taxpayer, nor the municipality had put forth any good evidence. However, since the taxpayer was the party bearing the burden of proof and the municipality was the party that was afforded the presumption of correctness, the Court ultimately ruled that, in a matter where neither side had put forward a good case, the Court must rule in favor of the municipality.

A secondary benefit of the appraisal is adding leverage in negotiating a settlement. Most of the assessors we have spoken with have told us that they will not offer a settlement to a taxpayer who has not first offered an appraisal. The rationale for this is routed in the presumption of correctness that would be afforded to the assessor in the event that the matter were to proceed to trial.

We are continuously surprised by the number of taxpayers who show up to their hearings without appraisals. While monetary concerns drive these decisions, it is extremely rare that a taxpayer without an appraisal receives any reduction in assessment. We therefore recommend that all taxpayers use appraisers to help win their tax appeals. The Law Office of Michael D. Mirne, L.L.C. owes most of its success to the quality appraisers we have used in our residential and commercial tax appeal assignments. Should you have any questions, please feel free to contact us.