Tax Carnival #57: Labor Day 2009
It's estimated tax time again

Madoff makes off like property tax bandit

The Madoff in question this time, though, is Ruth.

In June, Palm Beach County sent Ruth Madoff and her con man husband Bernie a tax refund check of $13,800. The money was for property taxes the couple overpaid on their South Florida mansion.

Apparently, the waterfront estate had been overvalued. The county arrived at that decision and issued the refund after an attorney for Ruth Madoff challenged the county's 2008 value assessment.

Now, with Bernie serving 150 years in federal prison for perpetrating a billion dollar Ponzi scheme that wiped out the life savings of many of his marks presumed friends, Ruth wants the refund check reissued in just her name.

Understandably, Ruth's request, made by letter last month to the Palm Beach County Tax Collector, is not sitting well with her husband's victims.

In a deal with prosecutors, Ruth agreed to give up all but $2.5 million of her fortune so the money could be redistributed to victims. The deal, signed after the property tax check was sent, specifically mentions tax refunds.

"Do I think she should keep the $13,800?" asked Madoff victim Ronnie Sue Ambrosino, who runs bernardmadoffvictims.org. "Absolutely not! Absolutely not. She's been forced to give up all her other assets, and that money should be put back in the pot."

There are a couple of lessons here:

One, the rich really are different.   

And two, it could really pay off to contest your home's real estate taxes if you think your local tax collector/assessor is charging you too much.

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Comments

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Kay

Good question. The Palm Beach Post story which broke the tax refund didn't go into details, but I suspect that the county tax assessor got the residence status correct (i.e., second home) since so many people are scrutinizing Madoff plus the need by Florida for as much tax revenue as it can get.

Terry

Were they getting the favorable 'primary residence' tax rate, or the rate for property which is not a primary residence?

I ask because many sunbirds (who winter in Florida and spend the rest of the year in the North) claim primary residences (for tax purposes) in both states, and two residences cannot BOTH be your primary residence.

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