Are Lenders Discriminating?

The government reported on Wednesday, October 1, 2009, that nearly one out of every three loan applications for a mortgage was denied last year. This is partly due to massive changes in the lending industry as a result of the housing market bust. However, what is interesting is that the denial rates for African Americans and Hispanics were nearly twice as much as the white borrower.

Recent records have shown that blacks and Hispanics are borrowing more from FHA-insured loans. This just illustrates that these race groups cannot borrow from any of the private sectors and must look for other available options. Borrowing from a FHA-insured loan means that these two race groups will likely experience high-priced loans. Last year, about 17 percent of blacks and 15 percent of Hispanics got high-priced loans, compared with about 7 percent of whites.

However, the mortgage industry claims that lenders are not being discriminated by race. The industry insists that it is due to the borrower’s credit scores and the size of their down payments. This may be true but the disappearance of “piggyback” mortgages has played a huge role in the lending problem. The “piggyback” mortgage allows borrowers to use a second mortgage to avoid making a 20 percent down payment. Today, they are non-existent. Only 98,000 were made last year, down from 1.3 million annually in 2006. Without these “piggyback” mortgages and with our unstable economy, every race is finding it more difficult to finance their mortgages. It just so happens that blacks and Hispanics are suffering the worst.

IRS VOLUNTARY DISCLOSURE PROGRAM

If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts, then most other incomes you may be required to report the account yearly to the Internal Revenue Service (IRS). The IRS has drawn a clear line between those individual taxpayers with offshore accounts who voluntarily come forward to get right with the government and those who continue to fail to meet their tax obligations. People who come in voluntarily will get a fair settlement. The IRS has set up a penalty framework that is believed to help those that voluntarily come forward. However, those that volunteer need to pay back any taxes and interest during the tax periods for years 2003 to 2008. Those that volunteer must also pay either an accuracy or delinquency penalty during the mentioned six year period. On top of those taxes, they will also pay a penalty of 20 percent of the amount in the foreign bank accounts in the year with the highest aggregate account or asset value. Just to be clear, this is 20 percent of the highest asset value of an account anytime in the past six years. By incorporating the penalty framework, it gives the voluntary taxpayers a certainty and consistency in how their case will be handled by the IRS. However, if the taxpayer is currently under examination by the IRS, then the voluntary disclosure program would not apply.

Some of the advantages of voluntarily disclosing with the IRS are that you can avoid substantial civil liability and eliminate the risk of criminal prosecution. However, on the other hand, some of the disadvantages of not reporting your offshore accounts to the IRS include the risk of detection by the IRS through an audit; imposition of substantial penalties; fraud penalties; foreign information return penalties; and the possible risk of criminal prosecution.

If after making a voluntary disclosure, the taxpayer disagrees with the 20 percent offshore penalty, the taxpayer’s case will follow a standard audit process. Then the taxpayer’s case will be subjected to a complete examination. Once the examination is complete, any penalties that apply would be imposed. These penalties could be substantially greater than the 20 percent penalty. However, if the case is still disagreed, then the taxpayer will then have recourse to Appeals.

If a taxpayer is unable to make full payments of all taxes and interest for all years covered, and the Voluntary Disclosure penalty, as well as all other unpaid, previously assessed liabilities, then the taxpayer must also submit a request that includes another payment arrangement that is acceptable to the IRS. The burden will be on the taxpayer to prove his/her inability to pay.

The taxpayer must be truthfully, timely, and completely honest in their voluntary disclosure or they could be subject to greater penalties or even possible criminal prosecution. Keep in mind that there is no guarantee that there will be an extension of the September 23 deadline and there is a possibility that a new program will be initiated with more severe penalties.

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Looking for a Home? Now is the Time to Buy

According to the IRS, more than 1.4 million Americans have recently claimed the new tax credit for first-time home buyers. The credit allows home buyers to either save up to 10% of the price of the home or the maximum of $8,000. The credit is only available to anyone who has not owned a home for three consecutive years before the purchase and the individual must make less than $75,000. For couples that maximum amount is doubled to $150,000. The best thing about the tax credit is that you receive an automatic $8,000 check by the IRS even if you still owe taxes or not.

In order to claim the tax credit, the home buyer must close on the house by Dec. 1, 2009. However, most people still fear that housing market will turn down again after the credit program expires. They believe the credit program is just a quick stimulus like the recent “cash for clunkers” deal. Recent reports show that Californians have taken advantage of the credit program the most. Florida and Texas rounding out the top three respectively.

The IRS estimates that over 1.8 million people will take advantage of the tax credit and there has been a push to continue the stimulus plan. Currently, there are six bills in Congress to extend the program. Some of the proposals ask for an extension up until the following year December 2010.

However, the White House has shown no signs of supporting any of the bills and the program has already cost $14 billion dollars to fund. Extending the program would cost more, which would be difficult to fund.

However, the National Association of Realtors (NAR) agrees that extending the credit would be costly; however, generating home sales would continue to strengthen the economy because when people buy homes they put a lot of cash into circulation. When people buy homes they usually buy furniture, appliances, or remodel the homes.

As of now, we will just have to wait and see if the government decides to extend the deadline. In the meantime, if you have the funds and are looking for a house, I would strongly suggest you take advantage of the tax credit and buy a home before the December 1 deadline.

Timeliness of Property Tax Appeal in Texas

When appealing a property tax assessment by a tax appraisal district's review board, a taxpayer must comply with the Texas Tax Code provision requiring a taxpayer to file an appeal within 45-days of notice of an appealable order.

Subject-matter jurisdiction cannot be waived, and it may be raised at any point in the proceeding. Alfonso v. Skadden, 251 S.W.3d 52, 55 (Tex. 2008); OAIC Commercial Assets, L.L.C. v. Stonegate Village, L.P., 234 S.W.3d 726, 735 (Tex. App.-Dallas 2007, pet. denied). “Whether a court has subject matter jurisdiction is a question of law.” Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004); see also Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002).

In cases where a taxpayer files an appeal outside of the appeal period, a state taxing authority has a right to have a case dismissed through a plea to a jurisdiction. When a plea to the jurisdiction challenges the pleadings, the courts must determine if the pleader has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the cause. See Miranda, 133 S.W.3d at 226. Texas courts construe the pleadings liberally in favor of the plaintiff and look to the pleader's intent; see Dallas Cent. Appraisal Dist. v. 1420 Viceroy Ltd. P'ship, 180 S.W.3d 267, 269 (Tex. App.-Dallas 2005, no pet.) Courts liberally construe the pleadings in favor of jurisdiction, focusing on the pleader's intent. If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court's jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend. See Miranda, 133 S.W.3d at 226-27 (citing County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend. Id. Miranda at 227.

Section 42.21 of the Tax Code. requires a party bringing an appeal of an appraisal review board decision to file a petition for review in district court within forty-five (45) days after the party received notice that a final appealable order was entered. Tex. Tax Code Ann. § 42.21(a) (Vernon 2008). The failure to file the petition for review timely deprives the trial court of jurisdiction over the claim. Appraisal Rev. Bd. v. Int'l Church of Foursquare Gospel, 719 S.W.2d 160, 160 (Tex. 1986) (per curiam); Gregg County Appraisal Dist. v. Laidlaw Waste Sys., Inc., 907 S.W.2d 12, 16 (Tex. App.-Tyler 1995, writ denied).

Taxpayers must timely file a state property tax appeal in State district court within 45 days of an appealable order from the district's appraisal review board's order. Legal arguments of violation of rights to due process, to access to the courts, and to open courts as guaranteed by the United States and Texas constitutions, all do not apply, and a taxpayer must strictly adhere to the timeliness of the filing requirement. The Texas courts have held that the Tax Code's provisions do not deny a taxpayer these rights. See Gen. Elec. Credit Corp. v. Midland Cent. Appraisal Dist., 808 S.W.2d 169, 172 (Tex. App.-El Paso), rev'd in part on other grounds, 826 S.W.2d 124 (Tex. 1991) (per curiam).

Please consult a Texas property tax attorney or lawyer for your specific property tax appeal case.