Many issues the taxpayer has with property taxation may resolved by an informal review of the property tax assessment with an assessor of the Montana Department of Revenue. The Montana Department of Revenue claims that over 90 percent of property tax disagreements are settled with informal review.[1]
To request informal review, the taxpayer must complete Montana Department of Revenue Form AB-26, Request for Informal Classification and Review. The request for informal classification and review often proceeds as follows:
- Submit the AB-26 to the Montana Department of Revenue within 30 days from the date of the property assessment notice.[2]
- On the AB-26, submit the grounds for which the taxpayer objects to the assessment. Often the objection is that the property is assessed in excess of statutory market value.
- If possible, provide documents that support the taxpayer’s position, such as an appraisal or comparative market analysis. For residential and commercial property, a realtor’s comparative market analysis is often used since it is cheaper than a fee appraisal. Other documents may include the actual selling price of the property[3], real estate listing agreements, real estate purchase offers, and values of neighboring property.
- If the taxpayer does not have additional information to submit, the taxpayer can still meet with the assessor to see the information the Department of Revenue has in support of the taxation and to ask questions.
- Check the box if you wish to meet with the Department of Revenue. I typically request a meeting.
- Depending on the value of the property, the taxpayer will often meet with the Department of Revenue personally rather than with legal counsel. However, legal counsel may be helpful at the informal review meeting for complex property and legal issues.
- If the taxpayer requests informal review, the Department of Revenue will often request to inspect the property in advance of the informal review meeting.
Practice Point. It is usually worthwhile for the taxpayer to attempt informal review before proceeding with the property tax appeal. There are some exceptions to this rule for complex special use property, but residential, commercial and agricultural property is especially susceptible to being resolved at informal review by talking out the issues with the Department of Revenue.
About the Author. Jared M. Le Fevre is a Partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal, state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.
[1] https://montana.servicenowservices.com/citizen/kb?id=kb_article_view&sysparm_article=KB0013232 (accessed on July 3, 2021).
[2] Mont. Code. Ann. § 15-7-102(3)(i).
[3] ARM § 42.20.454.