I feel a little bad picking on Delaware County and Muncie all the time, but there is so much drama in their government, it’s hard not to. The latest installment (brought to us by the intrepid Nick Werner at the Star Press) involves Muncie Mayor McShurley’s efforts to avoid paying property taxes Delaware County says are due. McShurley improperly claimed the homestead exemption. Seems she had been living in a home, got married, moved into a new house with her new husband, and kept claiming the homestead exemption on her old house.
Auditor Judy Rust determined $7,155 is the amount McShurley underpaid in property taxes on an improperly homesteaded rental property over the last seven years.
McShurley, who acknowledges she underpaid, believes Indiana law limits counties from rebilling taxpayers beyond the past three years.
“I feel like I’m taking a stand for the taxpayer,” she said.
The mayor said her decision to fight the bill is based largely on an experience in Kosciusko County, where she said she and her husband Ron were overbilled for 10 years on their lake home. When the McShurleys caught the error, however, officials there argued Indiana law prevented counties from crediting taxpayers for more than three years of overpaid taxes.
The same three-year limitation, she said, must apply when the roles are reversed.
I haven’t looked at the statute, which is what would govern a technical defense like the one advanced by Mayor McShurley, but the rationale for treating the governmental unit differently than the taxpayer — if that’s what happens — is reasonably easy. The taxpayer in this case controls the information. Delaware County doesn’t have an elite squad of tax enforcers ensuring that the mayor lives in the place where she is claiming a homestead deduction. They have to rely a great deal on the honesty of the citizenry and should probably have some leeway where it turns out there has been a mistake.
As pro-taxpayer stances on principals go, Mayor McShurley’s is pretty weak. If she’s right about the law, then by all means, she is within her rights to resist paying more than the law requires; but let’s not pretend she’s Jimmy Stewart’s Mr. Smith standing up to the rest of Washington.
to say she’s “taking a stand for the taxpayer” is erroneous. she’s taking a stand for the tax cheat.
I’m not sure why she was “overbilled” for her Lake County house, nor am I sure what 3 year defense may exist. But there is a difference between being your bill being wrong due to some technical error, and your bill being wrong because you lied on the tax form. The homestead exemption language is pretty clear about what you need to qualify, something that she probably already knew as mayor anyway, so this looks a lot like tax fraud.