Officials Probe Refund Collector

Dallas CPA failed to use required disclaimers in collecting a quarter-million dollars

Harris County Tax Assessor-Collector Paul Bettencourt and Chief Appraiser Jim Robinson have asked authorities to determine whether a Dallas CPA violated state law in soliciting Houston-area residents, many of them elderly, to become their property tax agent. Appraisal district officials also cancelled her status as an agent representing nearly 1,000 local homeowners.

Karyn Ward, an accountant acting as a tax agent, sent a targeted solicitation letter to owners of homes who had not applied for standard property tax breaks for homesteads or owners over 65 years of age. The letter informed recipients they were owed money from public agencies, but required they sign away rights to half of it before she disclosed the source.

To be designated as their tax agent, Ward used a commercial tax agent form rather than the residential form, which contains a prominent disclaimer.

In 1995 the Legislature passed a law requiring the use of a form that contains this bold-faced notice: "In some cases, you may want to contact your appraisal district or other local taxing units for free information or forms concerning your case before designating an agent." Robinson says Ward's failure to use that form led to her being canceled as the agent for the homeowner accounts.

Ward's operation was disclosed in an Insider column ("The Vulture Factor," March 16, 2000). She signed up 821 homeowners in Harris County and collected $275,848 in refund checks beginning in the last quarter of 1999. Under the terms of her contracts, Ward reaped a payback to her firm of $137,924. The activity is not illegal itself, but Robinson and Bettencourt say there's evidence Ward altered forms after homeowners signed them to direct refund checks to her offices rather than their homes.

"We have good reason to believe that after the people they solicited signed the appointment-of-agent form, that the forms were altered and a different copy was sent to us," says Robinson. "When you start getting into that sort of thing, there's a statute in the penal code that addresses tampering with a government record. You have a potential violation if the people that signed the things didn't authorize her to change it."

Bettencourt says that if Ward's contract with the homeowners provided for her to receive the checks, then the altered documents may be legal. The officials have asked the Harris County district attorney, the Texas attorney general and the U.S. Postal Service to investigate whether those document changes were illegal. Assistant District Attorney Russell Turbeville acknowledges he has received material by the tax agencies on Ward's operation but has not yet had time to study it.

Robinson says he is also investigating whether one of the officials in Ward's company who acted as a tax agent is not a CPA or a licensed tax consultant, as required by law.

Ward did not respond to calls made by the Press to her Dallas office.

Bettencourt is mailing out notices this week to the 821 county taxpayers who signed contracts with Ward. "What I can do as a tax assessor now is notify the accounts that their agents have been cancelled," he says. "Because the agreement was in effect when the refund came through, these checks have been sent, and the homeowner needs to contact her office as to the status of their funds."

Bettencourt says each account will be carefully monitored to make sure that Ward pays her clients the full amount they are due.

"She's shut down in Harris County for the moment," he comments. "But there's nothing to prevent her from running the [tax roll] computer algorithms and blasting out a bunch of mail and getting more people to sign up."

To keep that from happening, Robinson and Bettencourt say they'll combine property and voter databases to try to pinpoint homeowners over 65 who have failed to apply for tax exemptions. They hope to preempt others like Ward from reaping a fresh haul of gullible property owners by getting to the targets first.

"It's so simple to get homestead and over-65 exemptions," says Robinson. "It doesn't cost a thing. It's the biggest single tax-saver people have, and it distresses me that this kind of thing goes on and on, one company after another. We've had instances where elderly people sign with two different companies, and both sued 'em for a contingency fee, and that's just not right."

Adds Bettencourt: "We're going to try to take proactive steps, because it just absolutely galls me that somebody did this. I'm happy the taxpayers got $137,924; I'm just unhappy that [an agent] got the other half."

E-mail Tim Fleck at tim.fleck@houstonpress.com.

 
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