Despite Expert Testimony, Taxpayer Unable to Overcome Onerous Burden of Proof

New Jersey taxpayers should be well aware of the presumption of validity/correctness that attaches to original assessments and judgments of the county boards, and also that the taxpayer always carry the burden of proving that the assessment is wrong.  Overcoming the initial presumption, however, can be accomplished by providing some form of credible evidence.  For instance, litigants have been able to overcome the initial presumption by submitting comparable sales themselves without the need of an expert appraiser.  However, overcoming the presumption does not automatically warrant a reduction in the assessment, and the burden of showing that the assessment is wrong remains with the taxpayer.  Like most civil claims in this state, the evidentiary standard in a tax appeal require the taxpayer to prove his/her case by a fair preponderance of the evidence.  It is debatable, however, that this evidentiary standard in a tax appeal is not quite comparable to the same standard in other civil suits.

In a recent trial in Mir v. Paterson, the taxpayer challenged the 2015 assessment of a single-family residence.  At trial, the plaintiff presented a state certified residential real estate appraiser.  Plaintiff’s expert relies on three comparable sales of residential homes and utilized the sales comparison or market approach to arrive at his conclusion of value.  Plaintiff’s expert made various adjustments to account for the differences such as lot size, quality, gross living area, and other amenities.  The City presented no witness or evidence and instead relied on the presumption of validity of its assessment.

At the close of plaintiff’s case, the City moved to dismiss plaintiff’s case for failure to overcome the presumption of correctness.  The Court found that plaintiff produced sufficient evidence to overcome the presumption of correctness.  Nonetheless, the Court raised some serious deficiencies in the plaintiff’s expert’s testimony.  Mainly, the expert failed to provide the objective data supporting his adjustments in his report, and instead made various adjustments “based on his observation[s] of the market over a period of thirty years,” and the expert’s “pattern recognition.”  The court in response noted that “[s]imply referring to data collected over decades, which may exist in the expert’s office files, dos not provide the court with the necessary explanation  of the methodology and assumptions used in arriving at the adjustments.”  Furthermore, the “expert must provide the data, not just refer to it, in order to support adjustments underlying an opinion of value.”   Based on the expert’s insufficient support for his adjustments, the Court ultimately affirmed the assessment.

A copy of the court’s opinion can be found here.