Don't Mess With Taxes

Film tax credit survives California $ woes

California's budget crisis has all the elements of a major disaster movie.

There's the big-name star politician star, Gov. Arnold Schwarzenegger.

There are the continuing battles, no special effects needed, between Democrats and Republicans in Sacramento.

There's the supporting cast of millions, an electorate that propels the main money story line by voting for projects but against ways to pay for them.

And there's the unbelievable plot twist, a state paying its bills with IOUs.

Now all we need is a studio to green light the project. That shouldn't be too hard to find since, despite all it's money troubles, California has maintained its tax breaks for movies made in the state.

No money, but tax breaks: Yes, it's true. California's film incentive program is alive and well.

On July 1, the Californian Film Commission began accepting applications for the $100 million available to TV an movie producers in this the first year of the program.

According to Commission Director Amy Lemish, as of last week about 60 productions had applied.

Most of the tax break applications are from filmmakers planning independent movies with budgets between $1 million and $10 million. But there also are studio projects with stars applying for the break. (Has anyone checked The Governator's calendar recently?)

So how does a state that's now forced to pay businesses and individual taxpayers with IOUs (officially, they're registered warrants), justify keeping such a large tax break in place?

The IOU issue doesn't affect the California film tax break, according to state officials, because unlike incentives in some states, the Golden State break is not a refundable credit. Production companies can use it only to reduce their tax obligations, or sell it to someone else who can do the same.

The thinking apparently is that while the film companies may not owe much, or any, taxes, the ancillary companies and people that it hires will. Plus, at least those folks will have jobs.

Light, camera, tax break ... maybe: Speaking of other states, some are rewriting their TV and movie making tax credits.

In recent years,states around the country have implemented tax breaks to get the productions to shoot within their borders.

But now that budgets are tight, Marketplace radio reports that some critics are raising new questions about the tax strategy.

The radio program, however, might want to do a follow-up story in Iowa. Tax Updates notes that Hollywood is flocking to the Hawkeye State's 50 percent filmmaker subsidy.

Related posts:

• Hooray for Hollywood tax breaks
• Eastwood film benefits from tax breaks
• NYC tax code gets Emmy thanks
• New York gets ugly ... Ugly Betty, that is
• Accountants exciting lives -- on film
• Oscar Special: Movies & Money
• We'll always have Paris … I mean taxes!

More money for IRS enforcement

While there's still plenty of political sparring going on in Washington, lawmakers on both sides of Capitol Hill apparently can agree on one thing: The IRS needs more money to help it bring in more money.

The appropriations committees in both the Senate and House this week signed off on a fiscal 2010 budget of $12.15 billion for the IRS.

The House and Senate revenue panels also agreed that the IRS should get $5.5 billion this coming fiscal year to help it enforce our tax laws. That's a $387 million increase from last fiscal year's amount.

House Appropriations Committee Chairman David R. Obey (D-Wis.) noted in the bill's summary that "among other things, the increase is for the administration's initiative to target wealthy individuals and businesses who avoid U.S. taxes by parking money in overseas tax havens."

There are some slight differences in the bills, particularly in connection with the amount of money that would go toward the IRS' business modernization effort. This is a project that the IRS Oversight Board, a nine-member independent body charged to oversee the tax agency, says should be fully funded.

The modernization money, however, shouldn't be a big budget hurdle for House and Senate conferees to overcome. Congress is expected to reconcile the two funding bills before it takes its August recess

Just thought you should know about the added cash for tax examinations (that's the IRS' nicer word for audit) in case you were thinking about pushing the filing envelope a bit.

Ensign, his mistress and gift taxes

So Nevada Sen. John Ensign's parents helped pay off his girlfriend and her husband. Can this story get any ickier?

Forget I asked that. Having watched for years politicians do incredibly stupid things, the answer is yes, it could get more sordid.

In today's Capitol Hill soap opera installment, we learned that Ensign's folks gave his mistress and her family a total of $96,000.

But before we go any further, here's a quick recap:

• The married Ensign had an affair with Cindy Hampton.
  
• She was a campaign staffer at the time.
• Oh yeah, Cindy also was married when she had the fling.
  
• And oh yeah, her husband, Doug, was Ensign's administrative assistant.

Plus, in true TV daytime drama fashion, the Ensign family and the Hamptons were "longtime friends."

That friendship, say Ensign apologists, is why the 96 grand that the Hampton family got from the Senator's family is no big deal.

Hey, where can I get me some friends like that?

Gift tax exclusion issues: This latest revelation about the Republican lawmaker's affair also raises an interesting tax issue. Yep, the tax code was a consideration in Ensign's adultery.

According to the Senator's lawyer, the $96,000 given to Cindy and Doug Hampton and their two kids was done in a way to comply with gift tax laws.

Specifically, the Hamptons got the money in $12,000 increments.

A tax code provision allows anyone to give anyone else up to a certain amount of money without causing any immediate tax concerns for the giver. The Ensigns' $12,000 gifts indicate that they gave the Hamptons the money in 2008. That was the gift tax exclusion limit last year. For 2009, it was bumped up to $13,000.

As for the recipients, they don't have to worry about the IRS. Gifts are not taxable.

So Ensign's mom gave Cindy, Doug and their two kids $12,000 each, totaling $48,000. And Ensign's dad gave Cindy, Doug and the two kids $12,000 each, totaling $48,000.

$48,000 + $48,000 = $96,000.

And I thought it was just today's younger parents who clean up after their wayward children way too much.

Gifts and estate tax planning: The gift tax exclusion is a valuable tax planning tool for folks with large estates like, apparently, Sen. Ensign's folks.

If you have assets that are greater than the federal estate tax exemption (that's $3.5 million in 2009), you could get your holdings down to or below that figure by giving away some your assets to family and friends while you're still around to get their gratitude.

You can continue this munificent process with as many lucky gift recipients in the allowable annual amounts until your aggregate gifts reach that previously mentioned $1 million amount.

Once you hit that figure, then you've got some other tax considerations.

Of course, if you have enough money to be doling out sizable chunks of cash to family, friends and your child's lover, then you probably have a good tax adviser and/or attorney on retainer.

If, however, you're like the hubby and me and just want to know more out of curiosity, you can read about estate and gift taxes in these articles from the IRS, Bankrate,  Fairmark and SmartMoney. And this Don't Mess With Taxes item looks at possible estate tax changes (honestly, keep reading past the Michael Jackson stuff) expected later this year.

Fading 401(k) company matches

An interesting question was raised the other day on Moolanomy Answers: Can you have both a 401(k) and a traditional IRA?

The short answer is yes, but check out the full discussion for additional retirement saving whys and wherefores. As you've probably already guessed, I was one of the folks offering my thoughts.

Retirement considerations are always timely. Everyone -- the sane among us at least! -- wants to be able to one day spend time doing what we want, rather than what an employer demands.

Given today's economic and workplace realities, the best, and sometimes the only, way to do that is to contribute to retirement accounts outside your job. So if you don't have an IRA, either Roth or traditional, think about opening one and contributing as much as your budget, and tax laws, will allow.

Roth vs. traditional IRAs: Generally speaking, a Roth is a good account for a younger person. While your contributions aren't tax deductible, when you eventually take the money out to pay for your retirement fun, you won't owe any taxes on it.

Traditional IRAs, however, still appeal to some folks, primarily because the contributions, or at least part of them, might be tax deductible.

As with every tax situation, you need to carefully evaluate your personal circumstances before deciding which IRA is best for you. You can find some tips on making the choice from Cash Money Life, Investopedia, Investing Guide, Green Panda and Get Rich Slowly.

Missing matches: IRAs also are becoming more important because many 401(k)s aren't as valuable as they used to be. The reason? As the economy has worsened, many employers have reduced or eliminated the matching money they used to put into workers' 401(k) accounts.

A recent survey by the global business consulting firm Grant Thornton found that 29 percent of polled U.S. companies have already modified, or intend to modify, the matching contribution feature in their 401(k) plans during the 2009 plan year.

It gets worse. Two-thirds of the companies, or approximately 20 percent of all respondents, say they will eliminate their 401(k) match entirely.

"Clearly, the economic downturn is causing many companies to reevaluate their 401(k) plan design carefully, and in many cases, rethink their 401(k) plan strategy," said Gary Gross, a Grant Thornton LLP Compensation and Benefits executive director and co-author of the survey. "The highest anticipated action reported by all respondents is the complete elimination of the match, which will generate the most cash savings for the plan sponsor."

For company employees, however, it will generate less retirement savings.

AARP also opting out: It's not just businesses that are cutting back on retirement plan contributions.

The largest nonprofit organization for older Americans, AARP, also has decided to suspend its 401(k) match for at least nine months.

"We were not immune to the economic crisis, and we needed to respond as well," David Certner, AARP's legislative counsel and policy director, told the New York Times. "We didn’t take this lightly."

What's your company's 401(k) match position? If you're unsure, stop by your benefits office ASAP.

You can see what other firms are doing courtesy of the Pension Rights Center's list of employers that have downgraded their 401(k) matches.

Also check out the group's tips for keeping track of your pension.

IRS suspends some tax shelter penalties

The IRS has taken a Congressional request (yeah, let's call lit a request) to heart and is suspending tax shelter penalty collection efforts on certain small businesses.

Last month, a bipartisan group of Congressmen wrote to IRS Commissioner Douglas Shulman and asked him to temporarily stop imposing the penalties on small businesses.

These smaller firms, argue the lawmakers, are facing unintentional and excessive penalties for their utilization of some illegal tax shelters.

It's not that the Representatives and Senators want to give the offending companies a free pass. It's just that they believe the automatic penalties, created as part of the American Jobs Creation Act of 2004, are too severe for small firms.

The law, they say, was designed to punish big business.

And the legislators promise to revise the act so that the penalties more appropriate for smaller companies.

Shulman has agreed.

In a letter to the Congressmen, Shulman said through Sept. 30 his department will not initiate any effort to collect the penalties in cases where the annual tax benefit received from the illegal transaction is less than $100,000 for individuals or $200,000 for other taxpayers per year.

Under the existing law, penalties on corporations that exploit illegal tax shelters are automatically assessed and could reach as much as $300,000 a year. The members of Congress were concerned that the penalty was much more than what smaller companies usually gained from using the shelters.

The IRS will, however, continue to investigate the companies who use the shelters, even if it's not trying to get the penalty charges. Shulman told the Congressmen that his examiners have to do their jobs so they can accurately determine the amount of tax benefit; if it falls under the $100,000 or $200,000 amounts, collections will be suspended for the next few months.

"I'm glad the IRS has decided to do what is fair and to allow Congress to correct the unintentional consequences of a law intended to target big corporations," said Rep. John Lewis (D-Ga.), one of the men who asked for the IRS suspension and Chairman of the House Ways and Means Oversight Subcommittee.

Now the tax shelter penalty ball is back in Congress' court. During these months that the IRS is suspending collection efforts, lawmakers need to get busy and get the law changed.

Using IOUs to pay California taxes, fees

Have you ever wanted to pay a bill with an IOU?

Some Californians may soon be able to do just that.

Golden State officials began sending out IOUs last week to buy some time for lawmakers to figure out a way to close the state's $26.3 billion budget gap.

Now a bill that would require the state to accept its own IOUs -- $230 million worth have been issued since July 2 -- is moving through California's legislature.

State Assemblyman Joel Anderson, a Republican from La Mesa, is primary sponsor of a measure that would allow state vendors, contractors and others to use the California registered warrants they received to pay their state taxes, fees and other official state bills.

Paying taxes with your IOU: As for individuals who owe California income taxes, you don't have to wait. The Franchise Tax Board says it will take the state warrants in lieu of real money:

We will accept registered warrants that are not yet redeemable for full face value towards the payment of tax liabilities.

Endorse the back of the registered warrant with the phrase "Pay to the order of Franchise Tax Board" and your signature. Mail the registered warrant with an FTB payment voucher for the payment type you want to pay.

That's great news for blog reader GetSheila who wrote, "Every time I hear about this I get the urge to send an IOU in place of my state estimated tax payment. Fair is fair."

As long as the IOU you send is the one you got from the state, then go right ahead.

Remember, though, that when use a state IOU to pay your California tax liability, you'll forfeit the 3.75 percent interest on the warrant. In order to get that extra bit of cash, you must hold the warrant until it is redeemable, that is, until the state has the money to send you in place of the paper.

Actual IOUs get bill moving: Anderson introduced AB 1506 in late February, but according to the San Diego Union-Tribune the bill had little apparent support and no date was set for an initial hearing.

That all changed yesterday.

On Tuesday, the bill was unanimously approved by the Business and Professions Committee. It now heads to the state's Appropriations Committee.

In addition to the San Diego paper's coverage of the IOU payment legislation, you can read more on the measure at Sacramento's CBS13 and the Associated Press.

Cashing deadline imminent: Even if Anderson's legislation becomes law soon, it won't help folks who have other bills to pay. They'll still need actual cash.

That money could be harder to come by since some banks that have agreed to accept the warrants are nearing their cutoff date. Bank of America, Wells Fargo and Chase banks said they would redeem the IOUs for their customers, but only through July 10.

And folks with no bank account are turning to last-resort sources. For many, that means check cashing services. In these cases, the IOU holders could end up paying hefty fees to convert the state warrants to cash.

Taxes, not Tommy guns, to fight crime

I sneaked out of my office for a couple of hours today to catch Public Enemies. I enjoyed it, but then I'm a big fan of Johnny Depp, Michael Mann and old-time gangster tales.

Today's financial climate couldn't be more perfect for the movie.

John Dillinger and his gang were robbing banks in the early '30s, a time when financial institutions were failing, taking people's life savings down with them. To many, Dillinger was a folk hero. That's alluded to in a scene where Depp's Dillinger tells a bank employee to take his few dollars back; the robber only wants the bank's money.

Flash forward to today's anger at failing banks and criminal money managers and you have life and art repeatedly imitating each other.

Wielding tax weapons: Watching some of the Chicago area scenes naturally brought to mind that other Depression-era bad guy, Al Capone. In fact, Capone's right-hand man, Frank Nitti, also was connected to Dillinger.

But the tales of Dillinger and Capone had decidedly different endings.

FBI agents shot down Dillinger outside a Chicago movie theater.

Treasury officials took down Capone.

The tax code is still a powerful weapon when it comes to catching criminals, even those whose illegal acts aren't of the fiscal nature.

Many states require drug dealers to purchase tax stamps or face consequences. And now it looks like illegal downloaders could be in the tax man's cross hairs.

At least tax-related arrests are usually a lot less messy.

Depression-era fiscal and tax policy: Over at Marginal Revolution, Alex Tabarrok takes a look at fiscal policy during the Great Depression.

Tabarrok wrote the piece in November 2008, right after the financial services bailout bill had been enacted. In the wake of February's stimulus package, his look at government spending policies of the 1930s remains of interest.

Of note is his finding that 75 or so years ago, federal expenditures increased tremendously, but so did taxes.

That combination was why the federal spending back then didn't work. It wasn't that an influx of government money wasn't tried, Tabarrok writes, but that taxes were also raised to prohibitive levels.

How prohibitive? Check out this chart:

Whoa! Maybe that's why they robbed banks!

Tax Carnival #55: Tax Fireworks

Did the Fourth of July weekend end too soon for you? Then you've come to the right place.

We're keeping the fireworks going with some sparkling tax tips and tidbits in Tax Carnival #55: Tax Fireworks.

So while we still have a good supply of tax-themed Black Cat firecrackers, cherry bombs and Roman candles, let's light this fuse!

Here's an explosive statement to get the Carnival started: I Forgot To File My Taxes. Get all the details from Jeff Tilley at IRS Tax Problems.

ChristianPF presents Roth IRA conversion in 2010? It's posted at Money in the Bible: Christian Personal Finance Blog.

Does this sound familiar? A new government is in place and it's time for a full fledged budget to be announced. Expectations run high, the common man is hoping for a lot of respite. The government has to focus on spending (medical, education, health care, infrastructure) at the same time. It cannot afford to tax more and reduce the purchasing power of the people. Some innovation is called for in tax planning.

Nope, it's not the U.S., it's India. And Lubna, who provided that synopsis, then offers a wish list of the common Indian taxpayer in Law Street in The Economic Times (June 2009). It's posted at Talking Tax.

Brent, Tax Consultant presents What About Penalty Abatement? It's posted at Tax Relief Solutions.

Patrick @ Military Money presents Tax Advantages of 529 College Savings Plans, posted at Military Finance Network.

Another educational tax tip comes courtesy of FMF, who presents Last-Minute Tax Savings for College Expenses. It's posted at Free Money Finance.

Madison presents Tax Credit for First Time Home Buyers Improved, posted at My Dollar Plan.

Robert D Flach presents WHAT HAPPENS IN AN IRA STAYS IN THE IRA, posted at THE WANDERING TAX PRO.

Sun presents Did TurboTax Miscalculate My Recovery Rebate Credit? Find out at The Sun's Financial Diary.

Mistakes usually mean you'll hear from the IRS. On that subject, jim presents What is an IRS CP2000 Clarification Letter? It's posted at Blueprint for Financial Prosperity.

Silicon Valley Blogger presents Tax Tips For The Working Stiff, posted at The Digerati Life.

Darwin elaborates on one of those worker tax breaks in Flexible Spending Account: Rules, Eligibility and Savings Explanation. It's posted at Darwin's Finance.

Tony asks Should we tax the tall more than the small? Find the answer at This Young Economist.

David R. Lampsen presents Tax Day Discounts: Celebrating the Un-Celebratable, posted at Personal Finance Analyst.

Finance Tips 101 presents Car Donations? Knowing the Facts, posted at Finance Tips 101.

nickel presents $15,000 Homebuyer’s Tax Credit is Back on the Table, posted at fivecentnickel.com.

David Gross presents Fox News coaches conservatives in income tax resistance, posted at The Picket Line.

Dan Meyer presents Update on the Work Opportunity Credit (Form 8850), posted at Tick Marks.

Jeff Rose presents How To Save On Your Property Tax, posted at Good Financial Cents.

David discusses Amazon's Online Sales Tax Dilemma, posted in his UK Tax Blog.

Dave presents IRS Moves to Ban Tax Returns Filed By All But ‘Experts.’ It's posted at Cheapo Groovo.

Another tax professional topic comes to us via the taxguy. In his blog of the same name, he takes a look at what has become a heated debate about tax professional credential perceptions and misperceptions in Righteousness in Designation? Be sure to check out the comments, where the fireworks continue.

And with that, we wind down the July Tax Fireworks Carnival. Thanks to all bloggers who contributed and to you readers. We hope to see you back on the blog midway next month, specifically on Aug. 3.

You can be a part of that, and future, Tax Carnivals by submitting your tax-related item via our Blog Carnival page. Before doing so, check out our guidelines -- tax-only articles please! -- as well as peruse previous carnivals.

Taxpayer Advocate midyear to-do list

Congress has been pretty busy of late, what with energy legislation and the debate on health care. But National Taxpayer Advocate Nina E. Olson has added a few more things to Congress' to-do list.

As the Taxpayer Advocate Service enters its 10th year, Olson writes in her midyear report that both her office and the IRS "face a difficult environment for achieving what is, in essence, the same mission -- ensuring that the IRS treats taxpayers fairly and identifying ways to increase voluntary compliance while addressing noncompliance."

In addition, she notes that tax collection at a time when "increasing numbers of taxpayers have difficulty paying their daily living expenses" is a major challenge. As for specific areas Olson believes deserve special Congressional emphasis in fiscal year 2010, which begins Oct. 1, she cites four:

1. Taxpayer Services.
The report notes that the IRS, at the urging of House and Senate Appropriations Committees in 2006, has created a five-year strategic plan for taxpayer service known as the Taxpayer Assistance Blueprint. Olson, however, is concerned that the momentum to implement and refine the Blueprint's recommendations has stalled.

The perennial problem of IRS telephone service to taxpayers also falls into this category. The service level peaked at 87 percent in fiscal year 2004 and remained at a relatively high level, hitting 82 percent as recently as fiscal year 2007, notes Olson. But it plummeted to 53 percent in fiscal 2008, and the IRS has reduced its target goal for fiscal 2010 to just over 71 percent.

2. Oversight of Tax Return Preparers.
Tax return preparers complete about 62 percent of all individual income tax returns and therefore play a critical role in facilitating tax compliance, writes Olson. However, research indicates that a high percentage of preparers make mistakes on 1040s, fail to perform sufficient due diligence and even take positions that they know are not supportable.

In each of these cases, says Olson, taxpayers usually don't pay their proper tax amounts, resulting in less federal revenue and potentially subjecting taxpayers to subsequent penalties and interest when the mistakes are caught.

In the report, Olson reiterates her longstanding recommendation that the government regulate unenrolled federal tax return preparers, including by requiring initial testing and continuing professional education. The IRS began exploring such options earlier this year.

3. Offers in Compromise.
For the past nine years, the Advocate has expressed concern about the effectiveness of the IRS’ offer in compromise program, writes Olson. The program is designed to allow financially struggling taxpayers to pay what they can afford and make a fresh start.

Olson believes, however, that the IRS requires taxpayers to provide too much information with the initial application. That tends to deter taxpayers who could benefit from the program from applying.

4. Refundable Tax Credits.
These tax credits provide eligible taxpayers with money back even if they own no taxes. The American Recovery and Reinvestment Act of 2009, aka the stimulus bill, temporarily increased the refundable portions of the Earned Income Tax Credit (EITC) and the child tax credit. It also created some new refundable credits, including the Making Work Pay credit and American Opportunity education tax credit.

"While the decision to expand refundable credits is entirely reasonable from a policy standpoint," says Olson, "refundable credits present significant administrative challenges for the IRS."

Refundable credits may present an increased risk of fraud. This means the IRS must "perform a delicate balancing act," says Olson.

"On the one hand, if the IRS does not do enough to detect and prevent fraud, it may pay out billions of dollars as a result of false and fraudulent claims," she tells Congress. "On the other hand, if the IRS clamps down too tightly, hundreds of thousands and potentially millions of predominantly low income taxpayers will not receive timely refunds."

Olson says her office plans to study this and other issues the IRS faces in effectively administering refundable tax credits.

You can read more about these tax concerns, as well as many others, in the Taxpayer Advocate's full 131-page report, FY 2010 Objectives Report to Congress.

Real estate values fuel property tax fights

Our home is on a hill in suburban Austin. That's one of the main reasons we bought it. While it's a bit of pain for the hubby to mow, our lot offers us some great views, the most notable being undeveloped canyon land on two sides.

We moved into the place in late June 2005 and were thrilled when July 4 rolled around to discover that the wide open views also provide us with multiple fireworks displays from neighboring communities.

So each Independence Day has become an unofficial block party. Last night, as the hubby and I stood out in the middle of our street with neighbors watching five separate simulations of rockets red (and blue and green) glare, talk turned to property values.

Of primary interest to us all was how the asking prices of some for-sale homes might affect the value of our properties. And, of course, just how that might eventually show up in our annual property tax bills.

Property value concerns: We homeowners have always had to reconcile ourselves to conflicting emotions when it comes to the tax assessor's annual valuation of our personal castles. We love the place. We've gone into major debt to live here.

Then along comes this stranger telling us that our beloved abode is worth, in our estimation based on market conditions and our mortgage balance, way too much or way too little.

If we think the home is undervalued, it's a blow to our homeowner's pride. It also could be a cold financial slap. Nobody wants to owe more on a place than, by one accounting, what it's worth. Sadly, though, that's the case for many of today's homeowners.

On the other hand, there's the overvaluation issue. A too-high assessment means we'll have to write an inordinately large check to pay our annual property tax bill.

More and more homeowners in this situation are fighting back, as I noted back in December in Property tax appeals on the rise.

I had lunch a couple of weeks ago with a woman who was a bit late to our meal because she had been protesting an excessive assessment of her home's value. She won that battle.

I'm glad my friend was successful in getting her home's value, and ultimate tax bill, lowered. But she and her neighbors could end up paying another price. Or, as the New York Times notes today, Tax Bill Appeals Take Rising Toll on Governments.

"Homeowners across the country are challenging their property tax bills in droves as the value of their homes drop, threatening local governments with another big drain on their budgets," writes NYT staffer Jack Healy.

Healy goes on to note that, according to the National Association of Counties, 76 percent of large counties said that falling property tax revenue was significantly affecting their budgets. Officials in some states say their property tax revenue is falling for the first time since World War II.

Challenges mean choices: Does that mean we homeowners should gut it up for the overall well being our towns and states? Yeah, right.

But we do need to be aware that every time we or our neighbors are able to shave some dollars off their tax bills, we're going to have to make decisions (or demand our local and state officials make them) about what services we can do with less of or without entirely.

While some places (about 10 percent of large counties, writes Healy) are raising the tax rates associated with home values to minimize the revenue loss, most are simply absorbing the losses. That means laying off workers (at city, county and school district levels), renegotiating labor contracts and outsourced programs, freezing salaries and cutting services.

Now I'm not saying simply accept the assessor's incorrect figure. We all should pay only what's fairly owed.

But I am saying don't be surprised to see some changes, not all of them welcome, in your community because of your successful real estate property value challenge.

Property value protest tips: If you decide to protest your property assessment, the following articles, Web sites and blog posts offer some tips.

• Protesting Your Property Assessment (Bankrate.com)
• Protesting Property Taxes (Robin's Real Estate News)
• Suggestions to protest property tax increases (Yahoo! Answers)
• How to Protest Your Property Taxes and Win (Lifestyles Unlimited)
• Field Guide to Property Tax Appeals (Realtor.org)

Good luck!