Sen Kruse’s SB 88 would allow a county auditor to require proof that the property on which a taxpayer claims a homestead deduction is the person’s principal residence. It says that the auditor may limit the acceptable proof of that fact to a state income tax return, a valid driver’s license, or a valid voter registration card.
It repeals 50 IAC 24-3-2 (pdf). That administrative rule is much more permissive on the types of acceptable evidence, allowing:
(1) An Indiana identification card issued by the state of Indiana.
(2) An Indiana driver license or permit with a photo issued by the state of Indiana.
(3) An Indiana gun permit.
(4) A bank statement issued within sixty (60) days of application.
(5) Form W-2 (federal or state) or Form 1099.
(6) A state or federal tax return.
(7) A computer generated pay check stub.
(8) A valid employee identification card with a photo.
(9) A valid Indiana professional license.
(10) A valid insurance card.
(11) A Medicare or Medicaid card.
(12) U.S. military discharge or DD214 separation papers.
(13) An Indiana residency affidavit.
(14) A voter registration card.
(15) A valid Indiana vehicle or watercraft title or registration.
(16) Any other document with the applicant’s name and the address of the residence for which the applicant claims the
homestead standard deduction that provides information with reliability factors similar to the documents listed in subdivisions
(1) through (15) and that tends to show that the residence is the applicant’s principal place of residence.
Practical question: If you are claiming the homestead deduction when closing on a new home, how do you prove that you do in fact intend to reside there? These forms of documentary proof would only be available after the fact.
It would seem that the administrative rule makes a lot more sense.
Greg,
This bill could really delay filing for the exemption. There will always be some time lag as you wait for the deed to come back from the recorders office.
But you are right, it makes the claim of an exemption more difficult. To get a new drivers license you have to prove you live at the location, a task which takes time as you gather the proof.
In the final analysis, though, since property taxes are always one year arrears, there should be plenty of time to file for the exemption.
What people would try to cheat on their taxes? Reality is that according to my daughter who works in a county assessors office, seeking to claim homestead credit is a very common concern as people try for it on vacation property, vacant property, etc.. And no one’s property is as valuable as their assessment figure—but when asked would they sell it for the assessment figure–no way! (have to wonder what they think true value assessment is all about).
Interesting, Jack.
Cheating on income taxes is somewhat of a transient thing. I cannot exactly remember the statute of limtations on income tax returns, but I seemy to recall they are 3 years, 6 years if you underreport AGI by more than 25%. But that lake cabin or vacant lots will be there quite a few years. Not hard to audit and catch the fraud.
I have some relatives in Lake County tell me that many people that own their homes ouright will “dummy up” a mortgage with a relative or friend and claim the mortgage exemption. The clerks would have to be asleep at the switch or complicitin the fraud to let these fraudulent mortgages slip through.
Homestead fraud is rampant. I don’t see why they would accept anything other than a driver’s license.
Maybe they ought to name this proposed piece of legislation
“the Charlie White How To Claim Residency Act.”