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2170-2178 Billing and Payment Processing: Refunds

2170. APPLICATION OF REFUND
The tax collector may apply a refund due a taxpayer or the taxpayer's agent to any delinquent taxes owing on the same property, as long as the taxpayer remains liable for the payment of the delinquent tax (Rev. & Tax. Code §2635.5). This law applies to both secured and unsecured tax liens.

2171. CLAIM REQUIRED
A refund may be made only upon a verified claim filed by the person who paid the tax or his/her guardian, executor, or administrator (Rev. & Tax. Code §5097).

EXCEPTION: Under Revenue and Taxation Code section 5097.2, the auditor or tax collector can make a refund within four years after the date of the payment without a claim being filed, under the following conditions:

1) The amount has been paid more than once;

2) The amount paid exceeds the amount due on the property as shown on the roll;

3) The amount paid exceeds the amount due on the property as the result of corrections to the roll or cancellations ordered by the board of supervisors after such taxes were paid;

4) In any other case, where the claim for refund is made under penalty of perjury and is for an amount less than ten dollars ($10), with the written consent of the legal advisor; or,

5) The amount paid exceeds the amount due on the property as the result of a reduction attributable to a hearing before an assessment appeals board or an assessment hearing officer.

2172. TIME LIMITATIONS
If a verified, written claim for refund is filed pursuant to Revenue and Taxation Code section 5097 (M-2171), the following time frames apply.

1) Except as provided in section 5097(a)(3), the claim must be filed within four years after the making of the payment sought to be refunded, or within one year after the mailing of the notice as prescribed in Revenue and Taxation Code section 2635, or the period agreed upon by the assessor and the taxpayer as provided by Revenue and Taxation Code section 532.1, or within 60 days of the date of the notice by the auditor as prescribed in Revenue and Taxation Code section 4836(a), whichever is later (Rev. & Tax. Code §5097(a)(2)).

2) An application for a reduction of an assessment filed under Revenue and Taxation Code section 1603 constitutes a sufficient claim for refund if the applicant states that the claim is for a refund. If the application does not include a claim for refund, the applicant can file a separate claim for refund, pursuant to section 1603 or section 1604, within the time frame specified in Revenue and Taxation Code section 5097(a)(3). (Rev. & Tax. Code §5097(b)).

3) If an application for equalization of an escape assessment is filed pursuant to section 1603, a claim may be filed on any taxes resulting from the escape assessment or the original assessment to which the escape relates within the period provided in Revenue and Taxation Code section 5097(a)(3). (Rev. & Tax. Code §5097(c)).

2173. UNCLAIMED REFUNDABLE AMOUNTS
After the deadline for filing a claim for refund has expired under Revenue and Taxation Code section 5097 (M-2172), any unclaimed amount otherwise payable as a refund may be transferred to the county general fund, on order of the board of supervisors (Rev. & Tax. Code §5102).

2174. REFUNDS ORDERED BY BOARD OF SUPERVISORS
Any taxes, including penalties, interests, and costs paid (Rev. & Tax. Code §5107), before or after delinquency, shall be refunded by order of the board of supervisors, if they were:

1) Paid more than once;

2) Erroneously or illegally collected, including those paid due to the inability of the claimant to file a veteran's exemption because of military service outside of the continental limits of the United States between the lien date and 5 p.m. on April 15 of any year (Rev. & Tax. Code §273);

3) Illegally assessed or levied;

4) Paid on an assessment in excess of the ratio of assessed value to full value of the property, due to either the assessor's clerical error or erroneous information furnished by the assessee;

5) Paid on improvements nonexistent on the lien date;

6) Taxes collected on behalf of a special district from a taxpayer whose property was annexed to a city but not detached from the special district due to an error (Rev. & Tax. Code §5096.1); or

7) Any taxes paid on an assessment in excess of the value of the property as determined by the assessor, pursuant to Revenue and Taxation Code section 469 (Rev. & Tax. Code §5096).

See Revenue and Taxation Code section 5097 and M-1620 for the conditions to order refunds.

2175. COURT ACTION TO RECOVER
If the board of supervisors rejects a claim for refund, an action to recover may be instituted only in the superior court, but not in the small claims division of the superior court, within six months after the rejection (Rev. & Tax. Code §5141). Failure of the board of supervisors or the city council to act on the claim for a period of six months may be treated as a rejection for purposes of suit (Otis v. San Francisco, 170 Cal. 98).

When an application for reduction of assessment states that it is intended as a claim for refund under Revenue and Taxation Code section 5097, the claim is considered denied as of the date the final installment of the tax extended on the assessment becomes delinquent or on the date the equalization board makes its final determination on the application, whichever is later (Rev. & Tax. Code §5141).

Superior court actions may be brought by public agencies, pursuant to Revenue and Taxation Code section 5161.

2176. REPLICATED PAYMENTS
Section deleted and combined with section M-2133, RETURN OF REPLICATED OR DUPLICATE PAYMENT.

2177. INTEREST PAYABLE WITH CERTAIN REFUNDS
The county must pay interest, when such interest amounts to ten dollars or more, on any amounts refunded:

1) Under Revenue and Taxation Code section 5096.7 (property acquired by a public agency where a proration of taxes is required);

2) As a result of the reduction of assessed value following an application for equalization by a board of equalization (Rev. & Tax. Code §1605);

3) By a court action to recover penalties (Rev. & Tax. Code §§5150.5-5151); or

4) On correction of an assessor's clerical error.

NOTE: Revenue and Taxation Code section 5150.5 is an exception to the ten-dollar exclusion.

No interest may be paid if the taxpayer has been given the notice required by Revenue and Taxation Code section 2635 and has failed to apply for a refund within 30 days after the mailing of such notice (Rev. & Tax. Code §5151). Notice given pursuant to Revenue and Taxation Code section 2635 should inform the taxpayer of this fact.

The interest paid by the county on the refundable amounts shall be taken proportionately from the appropriate funds, as determined by the county auditor (Rev. & Tax. Code §5151).

A taxpayer has no right to recover interest from the county on property taxes that the county voluntarily refunds unless interest is provided for by statute (Ball v. Los Angeles County, 82 Cal. App. 3d 312; Cert. Den. 439 U.S. 1116).

2178. APPLICATION OF REFUND TO FUTURE TAX LIABILITIES
Taxpayers may enter into an agreement with the county to offset their refund amount against future tax liabilities. Interest accrues on the refund amount until it has been fully offset (Rev. & Tax. Code §5103).