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1240-1249 Payment Processing: Special Circumstances

1240. PARTIAL PAYMENT OF CURRENT TAXES
Notwithstanding any other provision of law, in the case of a deficiency in the payment of taxes due pursuant to provisions of Chapter 2 (Rev. & Tax. Code §§2601-2636), Chapter 2.1 (Rev. & Tax. Code §§2700-2708), or Chapter 4 (Rev. & Tax. Code §§2901-2928.1), with the approval of the board of supervisors, partial payment may be accepted from the taxpayer. The difference between the amount paid and the amount due should be treated as a delinquency in the same manner as any other delinquent tax (Rev. & Tax. Code §§2636, 2708, 2927.6).

1241. UNDERPAYMENTS
Counties operating under Part 8, Chapter 3, Division 1, of the Revenue and Taxation Code (commencing with Rev. & Tax. Code §4701), known as the "Teeter Plan," must place the tax payment in a trust fund and immediately notify the taxpayer of the deficiency. The taxpayer may pay the balance due until the time the property becomes tax-defaulted by operation of law. If the balance due is not paid on or before that date, the insufficient payment must be returned to the taxpayer and will become tax-defaulted. The tax collector may accept payments which are within ten dollars as payment in full (Rev. & Tax. Code §4717).

Counties that do not operate under the "Teeter Plan" and do not accept parcel payments of taxes pursuant to Revenue and Taxation Code sections 2607 or 2703, whichever is applicable, should be returned to the sender with notification of the amount of the underpayment, a statement of the current amount due, and the reason for return of the remittance. A copy of the notification should be retained. See M-1522 for notification of shortage in payment of amount due (Rev. & Tax. Code §4985.2); see also Attorney General Opinion 6-16-72.

1242. DISCOUNTING THE AMOUNT OF THE SECOND INSTALLMENT
Upon authorization by the board of supervisors, the tax collector may accept a discounted amount for payment of the second installment if the payment is made on or before the date the first installment is due. The rate of the discount is to be established annually by the board of supervisors (Rev. & Tax. Code §2607.1).

Exercise of this option requires establishment of a date for payment on or prior to the statutory due date of November 1 and publication of an appropriate notice (Rev. & Tax. Code §§2608-2610).

1243. ODD CENT MAY BE DROPPED
This section has been combined with M-1233.

1244. RETURNED CHECKS
Acceptance constitutes payment as of the date of acceptance only when it is duly paid (Rev. & Tax. Code §2506). The tax collector shall cancel on his/her records any indication of payment when negotiable paper, for any reason, is not paid and shall immediately send a notice of cancellation to the person who attempted payment. The tax lien continues as though no attempt at payment had been made (Rev. & Tax. Code §§2509-2510).

After the return to the depositing county officer of any unpaid negotiable paper, the tax collector may charge the person who attempted the payment a fee, not to exceed the cost of making required notifications to that person, processing the returned unpaid negotiable paper, and making the required cancellations on the tax roll. The fee amount is set by the board of supervisors and is subject to the fee review procedures required by Government Code section 54986. The fee may be added to the tax bill and collected in the same manner as costs recovered under Revenue and Taxation Code section 2621 (Rev. & Tax. Code §2509.1).

Government Code section 6157 authorizes a public agency to impose a reasonable charge, not to exceed the actual costs incurred by the agency, for any returned personal check and to prescribe a different method of making that payment and future payments for the person who drafted the check. Civil Code section 1719 provides that, if a check is returned and the person or entity who made the check refuses to honor the same within 30 days following a written demand, the person or entity shall be liable to the county for (in addition to the amount owed) damages of three times the amount of the check, but in no case less than $100 nor more than $1,500. The written demand must be sent by certified mail to the payor. If the payor has not satisfied the amount owed within 30 days of the mailed notice, an action may be brought in small claims court or in any other appropriate court (M-8199).

1245. REMITTANCES BY MAIL
If a remittance is received through the United States mail, in a sealed envelope, properly addressed with the required postage prepaid, it shall be deemed to have been received by the tax collector to whom it was addressed on the date shown by the post office cancellation mark and within the time of delinquency specified by law for that date. If satisfactory proof is submitted that mailing occurred on an earlier date, the remittance should be accepted as received in a timely manner (Rev. & Tax. Code §2512).

If a mailed remittance is received and accepted after any settlement with the auditor, the tax collector must file a supplemental report. By law, remittances received more than 30 days after the date and time set for payment do not have to be accepted (Rev. & Tax. Code §2512). This section shall not, for purposes of applying subdivision (a) of Revenue and Taxation Code section 3707, apply to a remittance sent by mail for the redemption of tax-defaulted property.

1245.1 REMITTANCES BY AN INDEPENDENT DELIVERY SERVICE
If a remittance is deposited for shipment with an independent delivery service, which is either designated as an independent delivery service by the Internal Revenue Service or approved by the tax collector, prior to a specified date and hour, and if it is received before 5 p.m. on the next business day after the effective delinquent date, it is deemed to be received on the date shown on the packing slip or air bill attached to the outside of the package (Rev. & Tax. Code §2512).

1245.2 REMITTANCE BY EFT
If a remittance to cover a payment, required by law to be made to a taxing agency prior to a specified date and hour, is made by an electronic payment option, such as wire transfer, telephoned credit card, or electronic Internet means, the remittance shall be deemed received on the date the transaction was completed by the taxpayer, if the remittance was made on the taxing agency’s authorized Internet website or via the taxing agency’s authorized telephone number. Proof of completion of the transaction in the form of a confirmation number or other convincing evidence shall be presented by the taxpayer to the satisfaction of the tax collector. This subdivision does not apply to payments by electronic fund transfer as provided in Revenue and Taxation Code sections 2503.1 and 2503.2 (Rev. & Tax. Code §2512(b)).

This section does not apply to payments made for the redemption of tax-defaulted property (Rev. & Tax. Code §2512(c)).

1246. PAYMENTS UNDER PROTEST PURSUANT TO SECTION 620
Law permits an assessee to make payment under protest and to petition for an assessment reduction when the assessor fails to send a notice, in accordance with Revenue and Taxation Code sections 619 or 621, to either an assessee whose property was not on the prior year's secured roll or an assessee of real property on the local secured roll whose property's full value has been increased by more than the Consumer Price Index adjustment permitted by the California State Constitution, Article XIII A, section 2 (also see Rev. & Tax. Code §51).

A protest is filed with the tax collector when the first installment of taxes is paid. It is accompanied by a petition for assessment reduction on the form prescribed by the county board (Form SCO 1-01).

The tax collector forwards the form to the clerk of the board with the notation that taxes were paid under protest, pursuant to Revenue and Taxation Code section 620. The auditor may impound the taxes until the final disposition of the claim or action if he/she reasonably anticipates that the tax may be refunded in whole or in part (Rev. & Tax. Code §620; Gov. Code §26906.1).

1247. DUPLICATE PAYMENTS
Within 90 days after payment, the tax collector may refund any excess resulting when tax payments are transferred from an unintended application, made either before or after delinquency (Rev. & Tax. Code §4916).

Duplicate payments may be refunded by either the tax collector or the auditor within four years after payment (Rev. & Tax. Code §§5096, 5097); (M-1601 and M-1603).

If two or more people insist on paying taxes on the same property, accept both payments and issue receipts. Note the duplicate payment on the roll. With the consent of the auditor, deposit the amount received in a special trust fund as a duplicate payment on a certain parcel.

Contesting owners may litigate over ownership (Rev. & Tax. Code §610 and Attorney General Letters 12-4-47 and 10-29-52) or, in the alternative, the owner of record may instruct the tax collector, by written request, to refund a replicated payment on a current assessment to the party who is not an owner of record, if the tendering party is known to the owner of record at the time of the request (Rev. & Tax. Code §2781.5 (a)).

Before the owner of record submits the request, both of the following requirements must be satisfied:

1) The request must be certified by the owner as true, correct, and complete to the best of his/her knowledge; and

2) The request must be accompanied by a certified copy of a deed, judgment, or other instrument, legally verifying ownership of the property (Rev. & Tax. Code §2781.5 (b)).

The tax collector is not required to determine ownership of the property (Rev. & Tax. Code §2781.5 (c)). This section does not apply to any payment on a current assessment that is delinquent (Rev. & Tax. Code §2781.5 (d)).

1248. RETURN OF REPLICATED OR DUPLICATE PAYMENT
A replicated payment is a payment submitted by, or on behalf of, a taxpayer that is intended to pay a specific tax or tax installment that has already been paid, whether or not the prior payment and the replicated payment are in the same amount (Rev. & Tax. Code §2780.5).

The law requires a county, whenever possible, to return replicated payments to the tendering party within 60 days of the date the payment becomes final. Payment is "final" when the original payment is not subject to chargeback, dishonor, or reversal (Rev. & Tax. Code §2781).

Replicated payments returned after 60 days must include interest at the rate provided in Revenue and Taxation Code section 5151, if that interest is ten dollars or more. Often replicated payments occur because a tax has been paid from an impound account and also by the owner, or by an escrow company unable to verify payment based on county records. These conditions often occur when a transfer of ownership is pending (Rev. & Tax. Code §§2780-2782).

Counties that manually process payments usually can verify duplicates and return one payment within a few days or weeks. Counties that use check-processing machines ordinarily must refund replicated amounts, and they must pay interest on any amounts not returned to the tendering parties within 60 days of becoming final (Rev. & Tax. Code §2782). The interest is calculated at the greater of 3% per annum or the county pool apportionment rate (Rev. & Tax. Code §5151) and applies from the 60th day after the replicated payment becomes final to the date the replicated payment is returned to the tendering party.

If the payor returns the wrong payment stub or does not indicate the intended application for the payment, the tax collector may exercise reasonable judgment in applying the payment (Rev. & Tax. Code §2783).

NOTE: The payment submitted must be clearly indicated as applicable only to a specific tax or tax installment. Usually such payment is accompanied by a letter or installment stub indicating the payor's intent to pay a particular tax or installment. In a case where no intent is expressed and an installment or a tax on another property owned by that person has not been paid, the tax collector may apply payment to the remaining installment or other tax without incurring interest penalties if subsequent data indicate that payment should not have been so applied (Rev. & Tax. Code §2635.5).

1249. INCORRECT AMOUNTS
See M-1241.