A recent Opinion of the Alabama Attorney General has brought much attention to a common practice – tax representatives offering estimates of value during Board of Equalization hearings on property tax assessments. The opinion concludes that tax representatives, who are not licensed by the Alabama Real Estate Appraisers Board, should be aware that providing an estimate of the value of property at an ad valorem tax assessment hearing may cause them to face criminal charges. See Opinion of the Alabama Attorney General No. 2010-094 (Aug. 18, 2010).
Under Alabama law, a taxpayer who disagrees with the assessed value of his property may protest the value set by the county tax assessor by filing a written objection with the county Board of Equalization. Although hearing procedures vary by county, hearings on these protests generally provide taxpayers with an opportunity to present evidence to the Board on the contested value.
Alabama law expressly permits a taxpayer to appear by “agent or attorney.” Ala. Code § 40-3-19. Many taxpayers, particularly those owning commercial property, often do not appear personally but rather engage the services of a CPA, lawyer, or consultant to protest the assessed value on their behalf. While some of these taxpayer representatives are licensed Alabama appraisers, many are not.
Although tax representatives may appear on a taxpayer’s behalf, Alabama law prohibits giving an appraisal without being licensed by the Alabama Real Estate Appraisers Board. Violation of this section is a Class A misdemeanor. An appraisal is loosely defined as an “opinion of value.” In 1999, the Alabama Real Estate Appraisers Board ruled that “it is unlawful for an individual that is not a licensed real estate appraiser in the State of Alabama to serve as a tax representative if their duties in the ad valorem tax hearing include giving a value estimate of the property in question.”That ruling received little attention, however, and representatives have continued to represent taxpayers in hearings before county Boards of Equalization, often providing opinions as to the subject property’s fair market value.
This new Attorney General Opinion has garnered widespread attention. Indeed, the authors are aware of at least one instance where a representative was threatened with sanctions when he appeared on a taxpayer’s behalf at a preliminary meeting. The authors believe that attorneys, CPAs, and other representatives, who are not licensed by the Alabama Real Estate Appraisers Board, may continue to represent taxpayers contesting a proposed assessment. But if they are not licensed, they should be careful to simply present evidence (e.g., certified appraisals and comparable sales) contradicting the assessed value, rather than opining as to a certain value. For that reason, it may be advisable to enlist an appraiser to testify at the hearing as an “expert” witness and to respond to any evidence presented by the tax assessor.