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Friday, March 29, 2024

NYC Loses Almost $60M in Tax Breaks to Deceased Residents

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As New York City Comptroller Scott Stringer put it, the Finance Department was most definitely “asleep at the wheel.”

In a stunning example of bureaucratic incompetence, the New York City Department of Finance lost out on collecting $59.2 million dollars in tax revenue since 2011 by giving a tax credit to various senior citizens and corporations…who were already deceased. As New York City Comptroller Scott Stringer put it, the Finance Department was most definitely “asleep at the wheel.”

What happened was a 10 year failure by the Finance Department to keep records for the The Senior Citizens Homeowners Exemption (SCHE) up to date. The Department was supposed to check every two years to see who was still eligible for the tax exemption…or in this case who was still alive. SCHE is meant to decrease any taxes on property for anyone over the age of 65 who owns a home and earns $37,400 or less a year.

It also offers a partial tax exemption for senior citizens who own family houses, condominiums, or co-op apartments in New York City. Those eligible can also find their property’s assessed value lowered between 5 to 50 percent, dependent on the income of the homeowner.

Furthermore, anyone eligible for SCHE in New York State qualify for the Enhanced School Tax Relief Exemption. This has an income gap of $79,050 a year. The enhanced STAR Program exempts the first $62,000 of the full value of the home from any school taxes.

According to a city audit, The New York City Department of Finance improperly gave tax credits to 3,890 properties from fiscal year 2011 to fiscal year 2017, despite their being ineligible. A total of 17,354 tax exemptions were given out to homeowners who had already died, resulting in a citywide tax revenue loss of at least $35,976,029 for fiscal year 2012 through 2017. Furthermore, these properties also received the School Tax Relief Exemption, which cost the city even more tax revenue, an additional $10,460,540.

As if that wasn’t bad enough, 71 additional properties that were also ineligible for any tax credit were given them, resulting in a further loss of $1,377,622 between the years of 2011 and 2016. And the city saw fit to dole out improper exemptions to an additional 573 properties (each with at least four units) costing the city $11,176,036 more.

City Comptroller Scott Stringer, who conducted up to six audits of the Finance Department since January 2014, and has discovered a grand total of at least $75 million in lost tax revenue due to the Department of Finance’s negligence was unsparing in his criticism.

“The potential impact of this lost revenue is huge,” he said. “This is money we could have used to build affordable housing or help people who need it the most or improve our homeless facilities where 57,000 people slept in a shelter last night.”

He has admitted that the Department of Finance has realized their mistake and is taking steps to correct them. These steps will include attempts to get back any benefits incorrectly given to corporations and possibly giving back benefits received by mistake from individuals who were ineligible for them. Mr Stringer added to his statement, “We want to be supportive as well.

To give them credit for anything is they recognize that because of our audit and what we showed them, they are now stopping the practice because of what we identified for them, so we want to work with them as well.”

Jesse Heimowitz

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