A Los Angeles attorney has sued the county for allegedly charging illegal fees to attorneys who represent clients with property tax disputes. According to a class action lawsuit filed by Owen Kaye, partner with Givner & Kaye, the county requires that attorneys register as “tax agents” and pay a $250 annual fee in order to represent clients that dispute their property taxes with the county.
Kaye filed the suit against the county and the Board of Supervisors on April 7 in the Los Angeles County Superior Court. Kaye claims that the 2013 county ordinance requiring attorneys to register as tax agents in order to represent clients with property tax disputes violates California’s State Bar Act and overrides the authority of the California Supreme Court to regulate attorneys.
Kaye also argues that the ordinance violates due process, equal protection and takings clauses of the federal and state constitutions, as well as Proposition 218 passed in 1996, which regulates how local revenues may be collected.
Thousands of attorneys have been required to register as tax agents, paying a small fee to process their applications and pay an annual $250 fee just in order to practice law, Kaye says. The ordinance effectively prohibits the practice of law unless attorneys pay the county beforehand. Many California counties have special boards to hear property assessment and tax disputes, but Los Angeles is the only county that requires attorneys representing plaintiffs register as tax agents and pay a fee.
Kaye cited Baron v. City of Los Angeles (1970) which held that local ordinances that try to regulate the practice of law tread on state law and must be struck down.
Property tax disputes are nothing in Los Angeles County, and that is partly because the county’s property tax rules and regulators are so unyielding. Dave Collins, tax collector for Los Angeles, says the most common dispute by property owners is that they never received the bill. Except that is not an accepted excuse. Even if property owners never receive a bill, or if it arrives with the previous owner’s name on it, or if the amount is much too high, they are still under an obligation to pay.
About 100,000 of Los Angeles County’s 2.3 million properties change hands every year, and tax bills are often sent to previous owners, who throw them out. Even so, property owners with disputes about incorrect tax bills get little to no consideration from county tax officials. Collins recommends that property owners pay first and dispute later.
Property owners who receive tax bills that seem too high should pay, and then petition the assessor’s office for a correction, according to Gil Parisi, Collin’s special assistant. The assessor’s office says it does not want anyone to have to pay penalties. Except if property owners hire an attorney to dispute a penalty, there is an automatic $250 fee to register as a tax agent, which Kaye is now disputing.
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