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Heckers v. Director, Division of Taxation

A-1430-08T2 (N.J. Super. App. Div. 2009) (Unpublished)

TAXATION; HOMESTEAD REBATE — Where the Director of Taxation has nothing to contradict the physical limitations described by a taxpayer and the taxpayer submits medical evidence that he or she was unable to file a homestead rebate application due to a hospitalization or illness and has made a good faith attempt to file a timely homestead rebate application, the taxpayer is entitled to a good faith extension.

A first time home buyer qualified for a homestead rebate. When filling out his income tax return, he mistakenly believed he had applied for the rebate when, in fact, he did not fill out the required rebate form. The following year, he became concerned that he had not received his rebate check. Concurrently, he suffered a herniated disc. His recuperation extended over three months during which time he required assistance for many basic events of daily living. As a result, the taxpayer did not investigate the missing rebate until after he recovered. The Division of Taxation responded by informing him that he had to file a separate application for the prior year. His completed application was denied. The denial letter informed him that it would reconsider his application if he provided medical evidence that he was unable to file a timely application due to illness or hospitalization. Although the taxpayer submitted a letter from his doctor explaining that he had surgery and that his recovery extended over two months, the Division denied his application again because the documentation did not substantiate that he filed or attempted to file a timely application even though he had filed his tax return. The taxpayer challenged the Division’s determination.

The Tax Court reversed, finding that the taxpayer had established medical cause for not filing a timely application based on the doctor’s letter and the taxpayer’s testimony that his activities were severely restricted during his recuperative period and that he required assistance in many of his daily activities. The Court distinguished payment of the taxpayer’s recurring financial obligations from a non-recurring homestead rebate application for which he did not have the form. In addition, it believed the taxpayer acted promptly once his physical condition allowed him to communicate with the Division. The Division of Taxation appealed, arguing: (a) an extension is available only for those taxpayers who demonstrate medical inability to file a timely application; and (b) the taxpayer did not present sufficient evidence to invoke the medical good cause exception.

The Appellate Division affirmed, noting that in a prior holding it had allowed a taxpayer, who had not filed a timely application due to medical reasons, to receive a homestead rebate ruling that the taxpayer’s severe and incapacitating illness, coupled with his good faith attempt to file a timely application, excused his failure to comply with the strict terms of the program. It also noted that in 2004 the Legislature amended the statutory good cause exception to allow a taxpayer to submit medical evidence that the taxpayer was unable to file an application as prescribed due to a hospitalization or illness or evidence that the taxpayer attempted to file a timely application. The good cause standard required a case-by-case assessment. Here, the taxpayer submitted a doctor’s certification that his condition required surgery and a prolonged period of recuperation. Further, the Court relied on the taxpayer’s testimony that his medical condition rendered him unable to pursue matters that required some investigation. The Director submitted nothing to contradict the physical limitations described by the taxpayer.


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