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Property owners cram receivers’ offices to prepay 2018 taxes

The IRS has not ruled on whether paying 2018’s bill in advance will be allowed as deductions on 2017 federal returns.

Thousands of Long Island property owners crammed into town tax receivers' offices on Tuesday, Dec. 26, 2017, in a rush to prepay their 2018 taxes hoping to secure a deduction this year before the new federal tax code goes into effect. (Credit: Newsday / Yeong-Ung Yang)

Phones ringing off the hook. Residents lined up out the door. Questions shouted at staff members.

Long Island town tax receivers arrived at their offices early Tuesday morning after a long holiday weekend to find property owners had beaten them there, hoping to prepay their 2018 taxes to take advantage of possible deductions this year before the new federal tax code goes into effect.

“It’s been a nightmare,” Riverhead Town Tax Receiver Laurie A. Zaneski said, adding that 30 phone messages were waiting when the office opened Tuesday.

Thousands of Long Island property owners are rushing to prepay their second-half school taxes, as well as their general taxes, before the year ends on Sunday.

“I have to prepay in order to save a penny,” Genevieve Charles, 65, of Uniondale said Tuesday at the Hempstead Town tax receiver’s office. “It is very frustrating.”

The efforts may be futile because the IRS has not ruled on whether 2018 local tax prepayments will be deductible in 2017 federal tax returns. IRS representatives did not respond Tuesday to an email requesting comment.

The new federal tax code’s $10,000 deduction cap on state and local income, sales and property taxes won’t cover the full amount that many Long Islanders pay. In 2016, average property tax bills were $11,232 in Nassau and $9,333 in Suffolk, according to an analysis by Attom Data Solutions, a California-based company that tracks real estate data.

Hours after President Donald Trump signed the $1.5 trillion federal tax bill into law on Friday, Gov. Andrew M. Cuomo issued an executive order allowing payment this month of all or partial 2018 taxes in towns and counties that usually do not allow it, including Nassau.

The changes left town tax receivers scrambling, especially in Nassau, where they were expecting prepayments for only school taxes.

Some receivers recalled employees from vacations over the Christmas holiday and are planning extended hours through the week, as they prepare to be flooded with residents’ questions and payments.

Nassau’s three towns will allow residents to mail their 2018 tax payments with a check dated in 2017 and with a 2017 postmark.

Oyster Bay Town officials arriving Tuesday for an 8 a.m. meeting at Town Hall East in Oyster Bay hamlet found a line of 20 people outside, even though the office didn’t open until 9 a.m.

“This is almost chaotic,” Oyster Bay Receiver of Taxes James Stefanich said, estimating that between 100 and 200 people arrived by 11:30 a.m.

In North Hempstead, the town’s 311 call center typically fields 600 to 700 calls on a Monday, according to town spokeswoman Carole Trottere, and well under that in the week after Christmas. But on Tuesday, the center was swamped with 1,435 calls by early afternoon, she said.

Hempstead Town Tax Receiver Donald Clavin held a news conference Tuesday as residents clutching their school tax bills watched.

“The federal tax code was nothing more than a lump of coal,” Clavin said. “I knew from the get-go we were going to be inundated with people.”

Nassau County Executive Edward Mangano signed warrants Tuesday morning finalizing the amount of taxes to be paid by each homeowner, Chief Deputy County Executive Rob Walker said.

But each receiver of taxes will need to verify that there “are no issues” with those numbers, which are in preliminary files sent to the receivers a few days ago, County Assessor James Davis said.

“We’re working very closely with every receiver to make sure there are no problems,” Davis said.

Once the receivers approve the numbers, county officials will scramble to put the tax amounts online, Davis said. It likely will take the county’s Information Technology Department a full day to do so, he said.

Maggie Mouscardy walked into Town Hall East in Oyster Bay to prepay the taxes on her mother’s Syosset home.

Mouscardy, 57, of Monterey Park, California, criticized Trump for the chaos and the IRS for not yet ruling on whether the prepaid taxes will be allowed as deductions on this year’s returns.

“They need to decide so people won’t be so confused when they’re paying their taxes,” she said. “No one even knows, so this may all be for naught.”

Linda Raskin Schwartz, 65, of Rockville Centre, went to the Hempstead Town offices to prepay her school taxes Tuesday. She didn’t know about the option for general taxes, but said she probably wouldn’t pay them this year.

“It’s a large outlay of cash at once,” she said.

Cuomo couldn’t issue the executive order before Trump signed the federal legislation, said Alphonso David, counsel to the governor.

“We’re working primarily with local officials and statewide officials to make sure they have the information they need,” David said. “We feel that we’re on solid legal ground,” even without an immediate decision from the IRS, he said.

In Suffolk, where property owners were able to prepay their general taxes before Cuomo’s executive order, town officials reported increases in payments, compared this time last year.

Annmarie Seddio, Shelter Island’s receiver of taxes, said her office collected $6,342,408, or 30 percent of its tax warrant, by Tuesday. Her office had received $4,259,901, or 20 percent of its tax warrant, by Dec. 27, 2016.

“It’s very crowded. . . . It’s impossible right now,” said Southampton Town Tax Receiver Theresa A. Kiernan. “At every given moment, there are four to five people at the counter. On January 10th, I’d expect it, and on May 31st, but not on December 26th.”

In Babylon Town, 150 residents waited in line in Town Hall to pay their 2018 property taxes Tuesday afternoon, Tax Receiver Corinne DiSomma said.

“There’s always lines,” she said. But this year the number of people seeking to pay their 2018 taxes in full has grown, town spokesman Kevin Bonner said.

“They all want to get that write-off,” DiSomma said.

With Christine Chung, Rachelle Blidner, Vera Chinese, Jean-Paul Salamanca and Jesse Coburn

What’s behind the early payment rush

  • President Donald Trump on Friday signed the federal tax code revision that, among other things, caps the deduction for state and local income and sales and property taxes at $10,000.
  • Then on Friday, Gov. Andrew M. Cuomo signed an executive order allowing payment this month of all or partial 2018 taxes in towns and counties that typically do not allow it, including Nassau.
  • Average property tax bills last year were $11,232 in Nassau and $9,333 in Suffolk, with many residents paying far more than $10,000 a year.
  • In Suffolk County, the first property tax payment covering the period between Dec. 1, 2017, and Nov. 30, 2018, is not due until Jan. 10.
  • In Nassau County, the first property tax payment for 2018 is due between Feb. 10 and 13.
  • The IRS has yet to rule on whether it will accept prepaid 2018 taxes as deductions on 2017 federal returns.

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