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Tuesday, October 18, 2005 | An independent audit examining the county’s property tax refund process that was released Monday by the County Treasurer-Tax Collector’s Office found that while county and state requirements were being met, further steps could be taken to streamline refund procedures and ensure that more monies make their way back to taxpayers.

The audit was commissioned by County Treasurer-Tax Collector Dan McAllister after a review of the refund process in August revealed that some 11,000 property taxpayers in the county were owed an estimated $2.4 million in tax refunds from overpaid taxes between 1996 and 2002.

According to McAllister, the overpaying of taxes is a normal byproduct of property tax collection, occurring when mortgage companies and property owners double-pay on taxes or when property owners pay additional taxes for refinancing their homes.

However, McAllister said that an August overview revealed that limited efforts had been made to refund owed monies prior to his election in late 2002 and highlighted general deficiencies in the refund process, spurring him to seek an audit examining the entire process.

“As nearly as we could tell, a letter or form had gone out, but not much more effort had been made to refund those monies,” said McAllister. “Because we had uncovered such a lofty sum … my decision was to put together a special team and dedicate that team to reuniting taxpayers with their tax money.”

As part of a general reform package, the office spent about $34,000 of their annual operational budget to seek the opinion of Macias, Gini & Company Consulting Group, an independent auditing firm out of Sacramento.

The audit, titled “County of San Diego Property Tax Refund for Overpayment and Escheatment Protocols Validation,” championed efforts made by McAllister since August to refund the monies owed taxpayers and avoid escheatment, a process by which funds are permanently turned over to the county’s general fund when no rightful claimant is found.

These efforts include tracking down and issuing 3,237 checks worth $408,395.42 to property taxpayers to date.

“[McAllister] has gone above and beyond the call of duty,” said Denise Callahan, project leader for the Macias audit group, noting that once some effort has been made to return the money and a waiting period of four years after the date that the refund was due had passed, McAllister was free to choose escheatment over the refund process.

The report went on to note that job processes implemented to track down over-payers and refund their monies are “not as efficient and effective as they could be.” The report’s 12 recommendations address deficiencies in equipment, data capture and tracking mechanisms that currently create barriers to speedy record-keeping and refund processes.

According to Callahan, information that is painstakingly tracked and cross-referenced by hand could be greatly improved with a comprehensive electronic system. However, an off-the-shelf software package dealing with property taxes in California does not currently exist.

McAllister says the tax office will sponsor the development of such a software package using money that was approved months ago to overhaul the county’s property tax system. He expects to get a good deal on such a project because it could be successfully marketed to other counties in California that are also struggling with antiquated tax refund procedures.

For most refund recipients, the checks will amount to a small but hardly life-changing surprise. Checks issued to date have averaged $148.46, with some as low as $7.50 and as high as $9,500.

According to Daniel Winchester, an associate professor at the Thomas Jefferson School of Law who specializes in tax law, the fact that refunds will be counted as taxable income in the year that they are received could further reduce their take-home value.

“Nobody’s gonna get a windfall,” said Winchester. “The actual after-tax amount could be less than the face amount.”

McAllister says that at the very least, most recipients can use the refund to buy a few tanks of gas to get them to work.

“It is our job to refund these monies,” said McAllister.

Please contact Jessica L. Horton directly at

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