Court Holds That Strict Compliance with Income and Expense Request (Chapter 91) Required to Avoid Dismissal of Property Tax Appeal

Posted in Bankruptcy & Creditor's Rights, Tax Appeals

In a recent case, the Tax Court of New Jersey dismissed a property owners’ tax appeal for providing a false response to the Assessor’s request for income and expenses under N.J.S.A. 54:4-34 (Chapter 91 Request).  In this case, the tax payer owned income producing property.  The Assessor timely and properly mailed the Chapter 91 Request to the Tax Payer.  The Tax Payer responded by claiming that the subject property was not income producing.  Shortly thereafter, the Plaintiff, who was prosecuting an appeal for the prior tax year, served discovery responses on the Municipality’s lawyer and the Assessor, which showed that the property was in fact generating rental income.

The tax payer filed an appeal for the subsequent tax year and the Municipality moved to dismiss the appeal on the grounds that the Assessor rendered a false Chapter 91 Request, which is an express ground for dismissal under the controlling statute.  The tax payer did not deny that it violated the statute, however, it argued that its false representation should be excused since the Assessor knew that the property was income producing, and had detailed information about the income generated by the property prior to the date the Assessor was required to fix its assessment for that upcoming tax year.

The Court rejected this argument and dismissed the appeal.  Reasoning that the statute is plain and unambiguous and bars an appeal when an owner provides false accounting in its response to a Chapter 91 Request.

This case stresses the importance of accurately completing a Chapter 91 Request, even when the Assessor is in possession of income and expense information concerning the subject property from an ongoing tax appeal. In accordance with prior decisions, the Chapter 91 Request statute is generally inflexible.  Tax payers should be aware of the importance of timely and accurately completing a Chapter 91 Request to avoid the harsh dismissal remedy that often results from non-compliance with the statute.

Marshall Kizner is an Associate in Stark & Stark’s Lawrenceville, New Jersey office concentrating in Bankruptcy & Creditors Rights. For questions, or additional information, please contact Mr. Kizner.