Tax Ferrets, Tax Consultants, Bounty Hunters, and Hired Guns: The Property Tax Netherworld Fueled by Contingency Fees and Champertous Agreements

89 Chi-Kent L. Rev. 289 (2014)

65 Pages Posted: 20 Jan 2014

See all articles by J. Entrikin

J. Entrikin

William H. Bowen School of Law, University of Arkansas at Little Rock

Date Written: January 10, 2014

Abstract

Contingency fee agreements between local tax assessors and contract auditors on the one hand, and property owners and private tax consultants on the other, create perverse financial incentives that undermine the integrity of state and local tax administration. When local governments engage outside auditors to identify undervalued or escaped taxable property, the practice raises serious due process and ethical concerns. As a matter of policy, diverting a share of property tax revenue to private third parties in consideration for outsourced tax assessment services undermines public accountability and reduces net property tax revenue for local government services. And when states allow private tax consultants to use contingency fee agreements to solicit clients seeking to reduce their share of local property taxes, they unwittingly divert substantial tax revenue to private entrepreneurs. The associated private transaction cost of seeking uniformity in local tax assessment unduly burdens the entire property tax system. Because contingency fee agreements with nonattorneys are generally unregulated by state law, honest taxpayers effectively subsidize not only property tax dodgers, but also contract auditors and private tax consultants.

Keywords: property tax, ad valorem, tax consultant, tax representative, state and local tax, tax assessment, tax ferret

Suggested Citation

Entrikin, J., Tax Ferrets, Tax Consultants, Bounty Hunters, and Hired Guns: The Property Tax Netherworld Fueled by Contingency Fees and Champertous Agreements (January 10, 2014). 89 Chi-Kent L. Rev. 289 (2014), Available at SSRN: https://ssrn.com/abstract=2381278

J. Entrikin (Contact Author)

William H. Bowen School of Law, University of Arkansas at Little Rock ( email )

1201 McMath Street
Little Rock, AR 72202
United States

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