2023 Indiana Code › Title 6. Taxation › Article 1.1. Property Taxes › Chapter 36. Miscellaneous Assessment and Collection Provisions › 6-1.1-36-17. Notice of Ineligibility for Standard Deduction; Collection of Adjustments in Tax Due; Nonreverting Fund

Sec. 17. (a) As used in this section, "nonreverting fund" refers to a nonreverting fund established under subsection (d).
(b) If a county auditor makes a determination that property was not eligible for a standard deduction under IC 6-1.1-12-37 in a particular year within three (3) years after the date on which taxes for the particular year are first due, the county auditor may issue a notice of taxes, interest, and penalties due to the owner that improperly received the standard deduction and include a statement that the payment is to be made payable to the county auditor. The additional taxes and civil penalties that result from the removal of the deduction, if any, are imposed for property taxes first due and payable for an assessment date occurring before the earlier of the date of the notation made under subsection (c)(2)(A) or the date a notice of an ineligible homestead lien is recorded under subsection (e)(2) in the office of the county recorder. The notice must require full payment of the amount owed within:
(1) one (1) year with no penalties and interest, if:
(A) the taxpayer did not comply with the requirement to return the homestead verification form under IC 6-1.1-22-8.1(b)(9) (expired January 1, 2015); and
(B) the county auditor allowed the taxpayer to receive the standard deduction in error; or
(2) thirty (30) days, if subdivision (1) does not apply.
With respect to property subject to a determination made under this subsection that is owned by a bona fide purchaser without knowledge of the determination, no lien attaches for any additional taxes and civil penalties that result from the removal of the deduction.
(c) If a county auditor issues a notice of taxes, interest, and penalties due to an owner under subsection (b), the county auditor shall:
(1) notify the county treasurer of the determination; and
(2) do one (1) or more of the following:
(A) Make a notation on the tax duplicate that the property is ineligible for the standard deduction and indicate the date the notation is made.
(B) Record a notice of an ineligible homestead lien under subsection (e)(2).
(d) Each county auditor shall establish a nonreverting fund. Upon collection of the adjustment in tax due (and any interest and penalties on that amount) after the termination of a deduction or credit as specified in subsection (b), the county treasurer shall deposit that amount:
(1) in the nonreverting fund, if the county contains a consolidated city; or
(2) if the county does not contain a consolidated city:
(A) in the nonreverting fund, to the extent that the amount collected, after deducting the direct cost of any contract, including contract related expenses, under which the contractor is required to identify homestead deduction eligibility, does not cause the total amount deposited in the nonreverting fund under this subsection for the year during which the amount is collected to exceed one hundred thousand dollars ($100,000); or
(B) in the county general fund, to the extent that the amount collected exceeds the amount that may be deposited in the nonreverting fund under clause (A).
(e) Any part of the amount due under subsection (b) that is not collected by the due date is subject to collection under one (1) or more of the following:
(1) After being placed on the tax duplicate for the affected property and collected in the same manner as other property taxes.
(2) Through a notice of an ineligible homestead lien recorded in the county recorder's office without charge.
The adjustment in tax due (and any interest and penalties on that amount) after the termination of a deduction or credit as specified in subsection (b) shall be deposited as specified in subsection (d) only in the first year in which that amount is collected. Upon the collection of the amount due under subsection (b) or the release of a lien recorded under subdivision (2), the county auditor shall submit the appropriate documentation to the county recorder, who shall amend the information recorded under subdivision (2) without charge to indicate that the lien has been released or the amount has been paid in full.
(f) The amount to be deposited in the nonreverting fund or the county general fund under subsection (d) includes adjustments in the tax due as a result of the termination of deductions or credits available only for property that satisfies the eligibility for a standard deduction under IC 6-1.1-12-37, including the following:
(1) Supplemental deductions under IC 6-1.1-12-37.5.
(2) Homestead credits under IC 6-1.1-20.4, IC 6-3.6-5, IC 6-3.6-11-3, or any other law.
(3) Credit for excessive property taxes under IC 6-1.1-20.6-7.5 or IC 6-1.1-20.6-8.5.
Any amount paid that exceeds the amount required to be deposited under subsection (d)(1) or (d)(2) shall be distributed as property taxes.
(g) Money deposited under subsection (d)(1) or (d)(2) shall be treated as miscellaneous revenue. Distributions shall be made from the nonreverting fund established under this section upon appropriation by the county fiscal body and shall be made only for the following purposes:
(1) Fees and other costs incurred by the county auditor to discover property that is eligible for a standard deduction under IC 6-1.1-12-37.
(2) Other expenses of the office of the county auditor.
The amount of deposits in a reverting fund, the balance of a nonreverting fund, and expenditures from a reverting fund may not be considered in establishing the budget of the office of the county auditor or in setting property tax levies that will be used in any part to fund the office of the county auditor.
As added by P.L.87-2009, SEC.14. Amended by P.L.13-2013, SEC.18; P.L.257-2013, SEC.31; P.L.94-2014, SEC.3; P.L.5-2015, SEC.19; P.L.203-2016, SEC.15; P.L.197-2016, SEC.23; P.L.85-2017, SEC.21.