When it comes to detecting homestead-exemption fraud, most tips come from the public.
But Lori Helton, North Miami Beach’s assistant director of information technology services, had an idea.
"I thought about making a list of people who were tenants and comparing that with the names of owners claiming a homestead tax exemption of the same property," she said.
The city, which owns its own water treatment plant, provides water to over 180,000 customers in four municipalities, plus the northeast unincorporated areas in Miami Dade County. Renters pay a higher deposit than homeowners.
So Helton compared the list of over 2,400 utility customers that had tenant deposits with the tax rolls that showed the homeowners of the properties. There were 85 instances in which the city had tenant deposits for homes claiming the homestead exemption.
That extra work paid off.
After examining the leads, the Miami-Dade Property Appraiser’s Office determined that 20 of Helton’s leads were actual violations. They are projected to lead to recovery of nearly $438,000 in unpaid taxes, according to the Property Appraiser’s Office.
Months earlier, Property Appraiser Carlos Lopez-Cantera, had a similar idea. He wanted to compare the names of Florida Power & Light account holders with the owners claiming exemptions for those accounts.
"I told FPL I would send them the tax roll with all the exemptions county-wide and asked them to cross reference it with their bills for the same addresses and wherever the ownership information didn’t lineup that would be a red-flag," said Lopez-Cantera.
But months went by and nothing came of the request.
"They’re an authorized monopoly so I thought they should be able to help," said Lopez-Cantera.
An FPL spokesman said the company had concerns about confidentiality of customer information.
"We have reached out to the county appraiser’s office to discuss their request, but we have strict, strict guidelines to protect the confidentiality of our customer's information," FPL spokesman David McDermitt said.
An expert said the company has a good point.
"I’m not surprised," said Robert Jarvis, law professor at Nova Southeastern University’s Shepard Broad Law Center. "If I were FPL’s lawyer I would have told them to turn over nothing until they had a subpoena to protect them from customers who may want to sue them," he said.
City water bills, however, are public record, said Darcee Siegel, city attorney for North Miami Beach.
"We can provide information from our customers from all the cities because there are no privacy issues involved. As long as we don’t share their social security numbers, it’s legal," she said.
Florida provides a $50,000 tax exemption from most property taxes on primary residences. But the exemption applies only to primary residences. Commercial properties, rental homes and other real estate doesn’t qualify. The annual savings for a homeowner in North Miami Beach would be around $925, including the smaller exemption for school taxes.
Claiming a homestead exemption for which the owner isn’t qualified — for example, because the property is rented to tenants rather than occupied by the owner —is a crime. Anyone caught could be forced to repay back taxes and penalties as well as facing possible criminal prosecution.
In July, Lopez-Cantera, started a task force of detectives to investigate fraudsters. Nine cities, Miami-Dade police, and Lopez-Cantera’s office have all contributed personnel. From September to October, the extra help uncovered $6.2 million in unpaid taxes across Miami-Dade, compared with $3 million during June and July before the task force got started.
Lopez-Cantera said Helton’s leads were a big help.
"We’re always happy to have great leads but that’s not to say that other cities aren’t cooperating in other ways. We have nine cities right now that have allowed us to train their individual police detectives so they can do the investigation portion with us," said Lopez-Cantera.
The other cities in the task force are Coral Gables, Key Biscayne, Miami Gardens, Pinecrest, South Miami, Sweetwater and West Miami.