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Audit reveals $8.3 million in fraudulent property tax breaks

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SARASOTA, CO., FL (WWSB) - An audit revealed $8.3 million in unpaid, fraudulent property taxes in Sarasota County. The culprits are homeowners who apply for and are granted a homestead exemption, when their Sarasota property isn't their primary residence.

Sarasota County is believed to be the first in the state to do such an extensive audit. The county property appraiser submitted a total of 110,000 homestead exemptions to an outside auditing firm. Of those, 98,000 were analyzed. The other 12,000 had been recently reviewed and approved in 2016, so they were excluded.

Of those 98,000 homestead exemptions, 2,584 raised concerns, and property owners were asked further questions. About half of those, 1,085 homestead exemptions were fully investigated, and in the end, the auditing firm found 547 property owners were committing fraud by collecting a tax break that they didn't qualify for.

"We want to be fair to every taxpayer," Administrative Director Brian Loughrey said. "Every taxpayer is willing to pay their taxes, they just don't want to pay more than they have to."

Those who committed fraud not only have to pay back the taxes, but they also pay a 50 percent penalty and another 15 percent in interest for every year that they didn't qualify for the homestead.

At this point, $6.7 million has been paid back. The county is still waiting to collect $1.6 million. The uncollected balances will be added as liens on the homes. The total of $8.3 million is being paid to the tax collector who then pays back every taxing authority who should have received the money in the first place. Those authorities include Sarasota County, EMS and school boards. Those authorities say they are still analyzing how this money may affect their budgets and taxes moving forward.

Although the numbers seem high, the number of fraud cases is lower than expected.

"It was a small number for us," Loughrey said. "We were told about one to two percent of all exemptions generally are on the list. For us, it was half of a percent."

Nearly $76 million in taxable value has now been added back to the Sarasota County tax rolls.

To make sure that this doesn't happen again, the property appraiser's office says they will be watching more closely and asking for more proof to make sure the homeowners really do live where they say. The county does not plan to do another audit in the near future now that nearly 100,000 files were reviewed. There are a handful of investigators in the property appraiser's office who will look at each case moving forward.

The audit started in 2015 and took more than 18 months to complete. It was done by the Tax Management Associates auditing firm and LexisNexis' Risk Solutions.