WHY IS IT IMPORTANT TO FILE A CLAIM FOR REFUND NOW ?
The short answer is, that if you donít, you canít get the money back that the government owes you. Additionally, the statute of limitations may run out or the government may shorten the statute of limitations. The statute of limitations sets out the time frame in which a person who is harmed has to file a claim for refund. Currently it is four years from the date of payment of the tax.
We want you to join the class action lawsuits that have been or will be filed.
NORMAL CLASS ACTION
A class action lawsuit is used to sue one or more defendants (those that are being sued) by multiple plaintiffs (those that are suing). In a typical class action lawsuit a person discovers that a defendant has been systematically harming him in some way. He also discovers that the defendant has been hurting all other similarly situated persons in the same way. Most of these people do not know that they have been harmed and have only a remote chance of finding out. You may ask yourself, "How could someone not know that they are being harmed?" A common example is when an entity is collecting interest on a debt and charges more interest than the parties agreed to. If you donít check the calculation yourself, you will never know.
Likewise, if you donít check to see if your property assessment went up by more than 2% from one year to the next, you will never know if you have overpaid your tax.
The person who discovers the illegal activity files a class claim (the administrative demand for relief) and then a lawsuit for himself and all others similarly situated after the class claim is administratively denied. The Court determines if there sufficiently common interests to maintain the lawsuit for all people and if there is the Court certifies all affected people as a class. Up until this time, most members of the class are not aware that they have been certified as a class. After class certification all members of the class are notified of the class action and are given the right to refuse joining the class. If they do not join the class they must seek their own relief.
TAXPAYER CLASS ACTIONS
The California Supreme Court has held that a class action may be employed to seek refunds of taxes. (Woosley v The State of California (1992) 3 Cal.4th 758, 788.) BUT THERE IS A WRINKLE. Unlike the normal class action situation where the class members have been notified that they have been harmed, the California Supreme Court has ruled that EACH taxpayer must discover that they have been harmed and file their own individual claim. ((Woosley v The State of California (1992) 3 Cal.4th 758, 788.) NICE TRICK, HUH!!!!
How did the California Supreme Court come to this conclusion? Californiaís state constitution provides that, "After payment of a tax claimed to be illegal, an action may be maintained to recover the tax paid, with interest, in such manner as may be provided by the legislature." (Article XIII, section 32.) The California Supreme Court has interpreted this to mean that if the Legislature does not specifically authorize the filing of a class claim, it is not allowed. For property taxes, the Legislature has not specifically allowed the filing of a class claim.
The Courts have also ruled that the government has no legal responsibility to notify taxpayers that they need to file claims for refunds. (State of California ex rel. Department of Motor Vehicles v The Superior Court of Los Angeles (1998) 66 Cal.App.4th 421, 438.) In fact, when a trial court judge ruled that the government had to notify taxpayers of their right to a refund an appellate court reversed the decision. The appellate court knew why the trial court judge had ordered the government to notify the taxpayers that they had been overcharged. They wrote:
"The trial court pointed out that the DMV had admitted that it has continued to collect fees declared unconstitutional by the Supreme Court in 1992 and had declared it had no intention of stopping the practice. The DMV estimated that it collected Ďroughly $1 billion dollars in the 18 years preceding the 1992 Woosley decision,í and estimates that it continues to collect between $25 and $30 million a year in unconstitutional fees.
"By ruling that each person must file his or her own claim, the Supreme Court spared the DMV a $1 billion refund. It appears that the DMV has returned that gesture by exploiting a kind of catch 22. It continues to impose unconstitutional fees unless individuals file refund claims [and, apparently, even after they do], and yet the public lacks sufficient information to file claims." (State of California ex rel. Department of Motor Vehicles v The Superior Court of Los Angeles (1998) 66 Cal.App.4th 421, 431.)"
The system as it currently stands is an outrage. When Americans hear about this kind of conduct we cannot help but think about our roots and the American Revolution that was fought to secure our liberty from a government that did not tax its citizens fairly. When a government fails in the simple principle of honesty it is up to its citizens to demand that its government be honest. After all, this conduct should offend every Californianís sense of what it is to be an American.
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Click here for Woosley vs. State of California
Click here for Appeal decision on Woosley vs. State of California