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1700-1706 Escape Assessments: Procedural Information

1700. GENERAL APPLICATION
Property escaping assessment on the local assessment roll shall be assessed by the assessor on discovery at its value on the lien date for the year for which it escaped assessment (Rev. & Tax. Code §531).

1701. TAX-DEEDED TO TAXING AGENCY
If property has not been locally assessed for any year because such property had been tax-deeded to a taxing agency, the property shall be deemed to have escaped assessment for such year.

Revenue and Taxation Code section 531.7prevents owners of property from avoiding taxes by allowing their property to become tax-deeded to a taxing agency other than the state, such as an irrigation district, and subsequently regaining title by redemption, free of intervening taxes that could have been levied on the county roll but for the tax-exempt status. This provision is applicable if:

1) The property has not been declared to be tax-defaulted for delinquent taxes; and,

2) The property has been redeemed from the tax sale and deeded to the taxing agency; or,

3) The tax deed to the taxing agency has been held to be invalid and has been canceled, provided that the statute of limitations provided for in Revenue and Taxation Code section 532 does not apply.

1702. EXEMPTIONS INCORRECTLY ALLOWED
If an audit reveals that any type of exemption has been incorrectly allowed, an escape assessment in the amount of the exemption shall be made (Rev. & Tax. Code §531.1).

1703. ENTRY ON ROLL
Escape assessments are entered on the roll for the current assessment year. If this is not the roll for the assessment year in which the property escaped assessment, the entry must be followed with "Escape assessment for year 20___ pursuant to Sections _____________________ of the Revenue and Taxation Code" (Rev. & Tax. Code §533).

NOTE: Revenue and Taxation Code section 118 defines an "assessment year" as covering the period beginning with the lien date and terminating immediately prior to the next succeeding lien date.

1704. EFFECT OF ENROLLMENT OF ESCAPE ASSESSMENT - NOTICE TO ASSESSEE
Escaped property is treated like property regularly assessed on the roll on which it is entered (Rev. & Tax. Code §534). This means it is entitled to and subject to county equalization, pursuant to the provisions of Revenue and Taxation Code section 1605.

No such assessment shall be effective for any purpose, including a review, equalization or adjustment by the county board of equalization, until the assessee has been notified personally or by U. S. mail.

Receipt by the assessee of a tax bill based on the escape assessment satisfies the requirements of notice (Rev. & Tax. Code §§534, 1605).

NOTE: When an increase in property tax occurs due to an escape assessment, the assessee has the option of paying the additional tax over a four-year period (Rev. & Tax. Code §4837.5); (M-1740 andM-1741).

1705. TAX COMPUTATION: INTEREST CHARGEABLE
When an escape assessment has been made, taxes for it are computed by multiplying the value by the tax rate to which the property would have been subject if it had appeared on the roll in the year when it should have been lawfully assessed (Rev. & Tax. Code §§506, 531, 2905).

NOTE: The delinquent penalty (Rev. & Tax. Code §§2617-2618, 2704-2705, 2922) should not be added to an escape assessment when it is enrolled. However, to some escapes the assessor must add a 25-percent penalty for willful concealment or a 75-percent penalty for fraud or collusion. According to a directive of the State Board of Equalization (Letter 77-90, dated July 8, 1977), the interest under section 506 also applies to the 25-percent penalty. When calculating interest for secured escape assessments, the tax must be divided so that interest is applied on half of the amount from December 10 and on the other half from April 10.

1706. ADJUSTMENT OF CHARGES
Charges added to the roll after it has been delivered to the tax collector require the auditor to make the necessary changes in his/her account with the tax collector (Rev. & Tax. Code §2604).