Home Publications Guides, Manuals, and Reference Materials County Tax Collectors' Reference Manual (2012) Chapter 1000 Secured Collections 1740-1741 Escape Assessments: Collection

1740-1741 Escape Assessments: Collection

1740. INSTALLMENT COLLECTION OF TAX INCREASE
When an increase in property tax, whether secured or unsecured, results from either an escape assessment or correction of an error on the roll, the assessee has the option of paying the tax over a four-year period (Rev. & Tax. Code §4837.5). Revenue and Taxation Code section 4837.5 was added to the law effective January 1, 1984, to replace the three-year installment plan (formerly §534.5) and the eight-year installment plan (formerly Rev. & Tax. Code §532.5). Its provisions apply to both the secured and unsecured assessment rolls.

NOTE:

1) The assessee cannot make installment payments pursuant to Revenue and Taxation Code section 4837.5 if the additional tax is less than $500.

2) Taxes resulting from correction of errors pursuant to Revenue and Taxation Code section 4831.5 do not qualify for payment by installments.

3) Supplemental assessments are not subject to the provisions of Revenue and Taxation Code section 4837.5 (Rev. & Tax. Code §75.13).

1741. FOUR-YEAR (FIVE-PAYMENT) PLAN
The auditor makes the appropriate changes to the roll when an error is discovered (Rev. & Tax. Code §4831) or upon notification by the assessor of an escape assessment (Rev. & Tax. Code §531).

If the total amount of the escape is $500 or more, the tax collector must include with the tax bill a notice to the assessee of his/her right to make an initial payment of 20 percent or more and the balance of payments over a four-year period (Rev. & Tax. Code §4837.5).

An assessee who elects to make installment payments for a secured escape must file a written request for an installment payment plan prior to 5 p.m. on April 10 or by 5 p.m. on the last day of the month following the month in which the tax bill is mailed, whichever is later. For unsecured escapes, the written request for installment payment shall be filed with the tax collector prior to 5 p.m. on August 31 (Rev. & Tax. Code §4837.5).

When payment by installments is requested, 20 percent or more of the tax must be paid by the deadline for filing the written request. The assessee must pay the current year’s taxes, and any prior year's taxes, penalties and costs with or prior to the initial installment payment (Rev. & Tax. Code §4837.5).

In each succeeding fiscal year, the assessee must pay, before the delinquency date of the second installment of taxes on the secured roll (April 10), all current year's taxes and a sum sufficient to reduce the outstanding balance of the escape tax by at least 20 percent of the original amount (Rev. & Tax. Code §4837.5).

In the case of unsecured taxes, the required annual installment shall be paid on or before August 31 (Rev. & Tax. Code §4837.5).

The tax collector may file the certificate of lien, provided for in Revenue and Taxation Code section 2191.3, against unsecured escapes, to provide the possibility of collection if the plan is defaulted. The certificate is filed, without fee, in the office of the county recorder of any county and shows the amount due, the name, Social Security number, if known, the last known address of the assessee liable for the amount, and the fact that the computation and levy of the tax have been complied with (Rev. & Tax. Code §2191.3).

Any such recorded lien applies for 10 years and has the force, effect, and priority of a judgment lien (Rev. & Tax. Code §§2191.4, 4831(c)).

No penalties shall be charged as long as installment payments are timely. In the case of secured taxes, as long as all payments are timely, the tax collector may not publish an affidavit of tax default, pursuant to Revenue and Taxation Code section 3371.

The tax collector may charge a fee for the actual cost of setting up the escape assessment payment plan (Rev. & Tax. Code §4837.5).

The escape installment plan is sometimes referred to as an "off-roll assessment" because the tax charge is established in the year in which the assessor enrolls the escape. The charge is reintroduced to the current roll by the auditor only if the assessee defaults the plan.

The plan is defaulted if:

1) Any installment is not paid by April 10;

2) Property on the secured roll becomes tax-defaulted or subject to the tax collector's power to sell;

3) Taxes for the property on the unsecured roll are not paid before becoming delinquent; or

4) There is an ownership change.

If the plan is defaulted, the remaining balance of the tax immediately becomes due and payable. The payment plan can be reinstated only if: (1) the assessee or the agent of the assessee can, by substantial evidence, convince the tax collector that the non-payment was not the fault of the assessee and (2) payment of the installment amount plus any additional interest that has accrued is made prior to the time the property becomes tax-defaulted or prior to June 30, whichever is earlier. The tax collector must inform the auditor of the defaulted, off-roll installment plan and of the delinquent amount remaining unpaid.

The auditor adds the unpaid balance, plus penalties and costs, to the current roll and adjusts the tax collector's charge accordingly. The remaining balance of the tax becomes subject to all of the provisions of law applicable to delinquent taxes.

When the installment account is paid in full or is placed on the tax rolls due to a defaulted payment plan and the tax collector has filed for record a certificate of lien, the tax collector shall also file for record a release of lien. The filing of the release of lien shall not be subject to a recording fee if the certificate of lien was filed in error (Gov. Code §27361.3).