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Tax In The Know

Posted by Kami G on April 28, 2014 at 1:15 PM

Tax In The Know!   

By Aamena Ahmed The Texas Tribune  While buying a home in Texas may not be as expensive as it is in other states, keeping up with property taxes — the 14th-highest in the nation, according to tax analysts — can be harder. This has spawned a fast-growing property tax lending industry in Texas in which property owners, many of them residential, take out high-interest loans to pay their delinquent tax bills. Like payday lending, the industry has fierce critics, who say it preys on people in dire straits and gives lenders the first shot at foreclosure. In interim charges released in January, House Speaker Joe Straus included the examination of a bill meant to more closely oversee the industry.

“When you look at Texas, we have one of the most unregulated tax industries in the country,” said state Sen. Sylvia Garcia, D-Houston, who referred to the practice as “legal theft.” “The industry just makes poor people poorer, and that’s totally unacceptable.”

But the industry has staunch defenders, who say they’re providing a needed service for taxpayers. They argue that they offer more flexible payment options than local taxing entities and give homeowners time to overcome their financial woes.

“We give property owners an option to help them get their taxes paid, to save money in tough times and ultimately get ownership of their property,” said Charles Brown, president of the property tax loan company Hunter-Kelsey and a member of the board of directors at the Texas Property Tax Lien holders Association.

Currently, there are 100 individually licensed property tax lending outfits in Texas — up from 55 in 2008, when the Texas Office of Consumer Credit Commissioner first began regulating the industry.

When a delinquent taxpayer pursues a property tax loan, the lender pays off the overdue amount, tacks on interest rates as high as 18 percent annually and adds closing costs, said Don Baylor, a senior policy analyst at the liberal Center for Public Policy Priorities.

Normally, government taxing entities are first in line to collect taxes from homeowners, giving them “priority lien” status. But once a homeowner accepts a loan from a property tax lender and the lender foots the tax bill, that priority lien transfers to the lender — giving the lender the first opportunity to foreclose on the property if loan payments are missed.

“This mechanism allows [the lender] to jump ahead of everyone,” said Robert Doggett, an attorney for Texas Rio Grande Legal Aid, the largest legal aid provider in Texas. “They don’t have any risk whatsoever. They are going to make their money either way.”

Consumer advocates don’t give government taxing entities a pass here. They argue that homeowners have been forced to pursue property tax loans because many local taxing districts did not offer alternative payment plans. In many cases, homeowners felt the only option was in the private market, Doggett added.

“Why do people feel like they need one of these loans? Because they have no other options,” he said. “People won’t need a property tax loan if the government can provide a better solution.”

Last legislative session, state Sen. Juan “Chuy” Hinojosa, D-McAllen, authored Senate Bill 476, which ultimately passed through its companion legislation, House Bill 1597, which requires taxing entities to now offer taxpayers a minimum installment plan of 12 months to pay what they owe with low interest rates.

“You have more and more homeowners losing their homes to high interest rates,” said Hinojosa, who thinks more can be done. “They need to have more options.”

Lawmakers also passed Senate Bill 247, a separate effort to further regulate the property tax loan industry that specifically prohibited lenders from selling the loans to third parties and falsely advertising their services. That bill, authored by outgoing state Sen. John Carona, R-Dallas, is the one Straus has identified for follow-up, and state Rep. René Oliveira, chairman of the House Business and Industry Committee, intends to hold a hearing on it before the end of May.

The industry has high profile — and moneyed — supporters, including San Antonio billionaire Red McCombs. McCombs has argued publicly in support of the priority lien status. In a column published in the Houston Chronicle last year, McCombs, who co-founded the property tax lending company Propel, wrote that “no one will provide financing for these delinquent property tax loans without it.” Propel was purchased in 2012 by San Diego, Calif.-based consumer debt-buying firm Encore Capital Group Inc. for $186.8 million, according to the San Antonio Express-News.

At least one Texas lawmaker has offered a far bolder solution to the challenges presented by property taxes. State Sen. Glenn Hegar, R-Katy, a Republican running for comptroller, has proposed phasing them out altogether.

“As long as we pay taxes,” he said at a Tea Party forum in February, “we have to ask, do we really own our property?”

Disclosure: Red McCombs is a major donor to The Texas Tribune. A complete list of Texas Tribune donors and sponsors can be viewed here.

*Editor's Note: An earlier version of this story did not include a reference to the passage of House Bill 1597, companion legislation of Senate Bill 476.

Joe Mastriano, CPA is a client who can speak on the above topic and more. Check out the links below: Topics:Joe often prefers to talk about how he has learned to help clients successfully avoid an audit, prevent all collection action, and cut Corporate tax to just the trust fund, (areas that he is well known for as they are pretty unique and very successful solutions) but will be happy to discuss current tax topics as he frequently does.

Here are a few talking points Joe can elaborate on:

Dealing with the increased Medicare tax, and tax on unearned income, and also the reduced medical tax deduction.Dealing with the increased rate of audits for high income people and how to prevent an audit.How the increased tax rates and the phase out of the personal exemption and itemized deductions Can put you in a marginal tax rate of over 50% (less for Texas) 


Joe Mastriano, CPA  has owned his Texas CPA firm for over 30 years, representingthousands of taxpayers before the IRS. He specializes in helping taxpayers avoidIRS audits,win IRS audits, establish installment agreements, offers, and resolving mostdifficult IRS problem issues. He has successfully helped many professionally licensed people solve their specific IRS problems. He also councilsattorneys and CPAs on their client’s IRS matters.  Joe has pioneeredcreative techniques for taxpayers to successfully avoid audits, reduce corporate debt to trust fund only, erasing all othercorporate tax debt, and prevent all possible IRS collection action in delinquent paymentmatters.


On This Day in History APRIL 30,



Apr 30, 1933:

Willie Nelson was Born Full Name: Willie Nelson Nationality: American Profession: Country Singer

Born: 30th April, 1933 (81 years old)

Star Sign: Taurus

Historical Events in the Life of Willie Nelson 1979-10-08 - 13th Country Music Association Award: Willie Nelson, Kenny Rogers & Barbara Mandrell wins

1982-10-11 - 16th Country Music Association Award: Willie Nelson & Ricky Skagg

1983-05-09 - 18th Academy of Country Music Awards: Alabama & Willie Nelson

1985-09-15 - Willie Nelson's Farm Aid concert

1992-02-02 - IRS & Willie Nelson settle on $9M tax bill (of $16.7M)


  TOP Community News!

First Lady Michelle Obama gets resume from girl with jobless dad. WASHINGTON (AP) — Michelle Obama's annual question-and-answer session with the children of Executive Office employees took a serious turn Thursday when a 10-year-old girl in the front row told the first lady that her dad had been out of work for three years. Then the girl popped up to hand the first lady his resume.

The first lady seemed a little taken aback but then explained to the other children, who might not have heard the girl's comment, that the matter was "a little private, but she's doing something for her dad." Mrs. Obama promised to deal with the matter later.

When the event ended, Mrs. Obama gave the girl, Charlotte Bell, a hug and then reached back to grab the resume off a table as she left the East Room. The first lady played host to the children at the White House on Take Our Daughters and Sons to Work Day.

Charlotte's family had joked over the weekend about making a job pitch to the first lady, but her parents didn't know she would give it a try, according to her mother, an executive branch employee who did not want to be identified.

Charlotte's father, Ben Bell, has been looking for a policy job for more than two years and recently has been trying to get a job with the Obama administration. He worked on the Obama campaign in 2012.     The Kami Grayson PR Agency representing Joe Mastriano, CPA a client who can talk about why buying a home in Texas may not be as expensive as it is in other states. Joe Mastriano, CPA is a former client of Real News PR Jeff Crilley.

To Book: Mr. Joe Mastriano, CPA 

Off -713-774-4467

[email protected]

This message sent to %%emailaddress%% by [email protected]

Joe Mastriano,CPA, Joe Mastriano, PC, 8303 S.W. Freeway Ste.636, Houston, TX 77084 Phone: 713-774-4467

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