BUFFALO, N.Y. (WIVB) — Homeowners who receive tax breaks through the STAR tax exemption will soon have to re-register because of wide-spread fraud in the program.
The exemption has saved New Yorkers billions of dollars on their school property tax bills, since state lawmakers created it almost 16 years ago. But an audit by the State Comptroller found a disturbing number of mistakes and fraud in the program. Some homeowners were getting breaks on two or more properties and auditors estimated as much as $13 million was lost last year.
City and Town of Tonawanda Tax Assessor David Marrano said, "Right now, there is no system in place that allows an assessor to determine if you have STAR in his community, or have STAR in another community - maybe in Allegany County or some other place - because there is no real identifier system."
Marrano says the safeguards against someone double-dipping in the STAR program are so weak he couldn't even tell if someone was getting the exemption in both the town and the city.
State lawmakers are crafting a bill that would create system for keeping homeowners honest, but it is going to require registering for the STAR tax exemption all over again - but most likely for next year.
"Everyone who is going to get STAR for the upcoming September bills who are eligible will have it and will keep it, and any of this legislation won't affect the STAR exemptions that will go in effect, probably in September of 2014," Marrano explained.
While the legislation is still a work in progress, Marrano suspects tax officials will be using Social Security numbers as identifiers, which some filers are already required to submit.
"While we may have that - if that is the identifier - while we may have that in some of the data they have, again, we have no real database on that," he noted.
State officials say the measure doesn't even come up for a vote until Thursday and tax officials will give homeowners at least two months advance notice before the new regulations take effect.
Homeowners will have to register for the exemption with the state tax department rather than their local tax assessor, which will help in the creation of a statewide registry.
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