Columnas del Procurador General
Beware of "Tax Reduction" Scams
Beware of "Tax Reduction" Scams
By Greg Abbott
Attorney General of Texas
Protecting senior citizens is a top priority of my administration. We do not tolerate individuals or businesses that
target senior Texans for financial exploitation. That is why we recently took legal action to halt alleged violations
of the Deceptive Trade Practices Act by an outfit offering "tax reductions" to seniors for a fee.
In Texas, certain tax advantages are available to persons over the age of 65. Any homeowner, not just a senior, can apply
for a homestead exemption on a primary place of residence. However, there are special, additional exemptions available to
seniors. You can contact your local tax assessor/collector for more information.
There is no fee for making the application for a homestead exemption. However, certain companies offer to "process" the
application for a fee. Generally, the company is simply filling out the application and filing it for you. You could easily
save the fee by filling out this simple application for yourself.
Some companies in the past have styled their advertising to make it appear that they are an official taxing authority, or
that their fee must be paid in order for the homeowner to receive the exemption. In fact, the law requires the company to
make it quite clear that they are not a governmental agency.
Our regional Consumer Protection Office in Dallas, acting on consumer complaints, filed a lawsuit and obtained a temporary
restraining order on December 17, 2003, against a company that presented itself as a "tax processing center." The company
mailed a solicitation to Collin County seniors, seeking a $55 fee. In addition to taking immediate legal action, we issued
a Senior Alert to inform homeowners that the reductions offered in the sales pitch were all available directly from their
local taxing authority.
The solicitation also mentioned a tax "freeze" for the elderly. This is a reference to another option available to seniors.
The option is better described as a ceiling, rather than a freeze, because it provides that their property taxes will not
go up for that home so long as there are no new improvements, once they have registered as over-65 homeowners. If for some
reason their property is reassessed at a lower value, their taxes may go down, but they may not go up. There is no fee for
applying for this benefit.
Another tax provision that may benefit a senior homeowner is the property tax deferment. This is an arrangement that makes
it so that seniors may defer, or delay, the payment of taxes. The tax must still eventually be paid, but it is allowed to
simply accrue during the homeowner's lifetime. The unpaid taxes do accrue interest, however. The deferred taxes and
interest are then eventually paid out of the estate after the homeowner's death.
The tax deferment can be a great benefit for certain homeowners with limited income. If the homeowner has applied for
deferment, there are no penalties for delaying the payment of the taxes. However, a tax lien is placed on the property.
Seniors may choose not to use the deferment option, because it can significantly reduce the value of their estate and the
amount their heirs will inherit. But for some senior homeowners, it may provide much needed relief.
Beware of any solicitation that involves a fee to apply or register you for tax reductions, freezes, ceilings or deferments.
You can apply for any of those benefits yourself from your local taxing authority.
POINTS TO REMEMBER
TAX BREAKS FOR SENIOR TEXANS
• No fee to apply for special homestead exemptions
• No fee to register for tax ceilings
• No fee to apply for deferments
• Deferments are recouped from the estate, with interest
• Tax deferment creates a tax lien on the property
Contact your local county tax assessor-collector for more information.
Sign up to receive our Senior Alerts in the Senior Texans section of our Web site at:
Contact your local Area Agency on Aging to inquire about programs and services for seniors at (800) 252-9240.
Legal Hotline for Older Texans free legal advice to Texans age 60+
Information on this and other topics is available on the Attorney General's Web site at www.oag.state.tx.us.