How to Withdraw a Protest

No matter how diligent property owners and tax consultants may be in reviewing and analyzing property values and deciding whether to file a value protest, there seem to always be some protests filed that the owner or consultant decide not to pursue. Such protests can be withdrawn.

However, unknown errors or unexpected circumstances might be discovered or occur in the future that would necessitate a later protest or correction motion. Therefore, in withdrawing a protest, it is important to take steps to be certain that future correction remedies remain viable.

Why Withdraw a Protest

There could be any number of reasons as to why a property owner or tax consultant would want to withdraw a filed protest instead of pursuing a correction. For example:

Lack of authority. In some cases, a tax consultant will file a defensive protest for a property owner whom the consultant previously represented in anticipation of continued employment. However, the owner might then decide against hiring the consultant or even terminate the consultant's current employment. In such circumstances, the consultant would not want to pursue the protest.

Change in ownership. Sometimes, after a protest is filed, there will be a change in ownership of the property, either by sale or foreclosure. With the change in ownership, the prior owner might decide not to pursue a filed protest, even though the owner remains personally liable for the taxes as the January 1 owner. While the protest opportunity should be offered to the new owner as successor in interest, the prior owner and that owner's consultant might have no interest in pursuing a protest that would provide no benefit for either the prior owner or the consultant.

Bankruptcy. If the property owner files for bankruptcy with a protest pending, an issue is raised as to whether the consultant can proceed with representation of the owner absent approval from the bankruptcy court. While the court and any appointed bankruptcy trustee should be informed of the pending protest, the consultant should seek a new employment contract if continued representation is desired. Until approved by the bankruptcy court, the consultant could be working for free.

Lack of information. In some cases, an owner or representatives of the owner are unable to provide the consultant with necessary information to proceed with a protest. This may be financial or other documents that the consultant needs to either prove a different value or some error impacting the value.

Lack of interest. There are also those cases in which a consultant attempts to protect his client's rights, but the owner just does not desire to pursue a protest for whatever reason.

Withdrawing a Protest

While there is nothing specifically in the Texas Tax Code about withdrawing a protest, it appears clear that a property owner is not required to pursue a filed protest if he does not wish to do so. In such cases, the protest can be withdrawn.

The key is to make sure that the withdrawal is truly a withdrawal and leaves open the door for a future late protest or correction motion, should the need arise.

Letter of Withdrawal

One of the most common methods for withdrawing a protest is sending a letter or other written communication to the appraisal review board stating a desire to withdraw the protest.

If such a letter is sent, it is important that it identify the protest as clearly as possible. The owner or consultant making the withdrawal should identify the property, the appraisal account, the protest, the review board case number and hearing date (if available), and the authority of the person to withdraw the protest (whether a consultant with a valid letter of authorization on file or an owner's officer or representative). The more information that can be provided regarding the filed protest, the better the chance that the specific protest will be withdrawn.

This is especially important if multiple protests are filed, but only some are being withdrawn. The owner or consultant wants to be certain that no protests are accidentally withdrawn.

The letter should be sent to the review board, with a copy to the appraisal district. Just as the protest must be filed with the review board, the withdrawal should be filed with that body.

The owner or consultant should not state any basis for the withdrawal. There is nothing that requires that any reason for withdrawal be given. And, the owner or consultant certainly does not want to imply that the protest is being withdrawn because there is no dispute as to the value or that the district's value is correct.

Also, the letter should be just a plain letter. No attempt should be made to send any type of notarized statement or verified withdrawal, as there is always the risk that the appraisal district might attempt to use any sworn letter as an affidavit for the protest.

No Showing a Hearing

Another way to withdraw a protest is to fail to show at the scheduled hearing of the protest. The Tax Code, as interpreted by the courts, requires that a property owner appear in person, by agent or by affidavit at a protest hearing for the review board to have jurisdiction over the protest.

If the property owner fails to appear (in person, by agent, or by affidavit), then the protest should be effectively withdrawn. While the review board might issue an order on the protest, it should be an order stating that the case is dismissed for lack of jurisdiction. If any other type of order is issued by the review board, then there is a risk of waiver of future remedies. With such an order, the owner will need to make a determination of whether to proceed with a judicial appeal of that order or merely wait to determine if any future protest or motion is necessary and then contest the original order at that time. The owner might also request that a corrected order of dismissal be issued to clarify that the protest was withdrawn.

There used to be some controversy as to whether a filed and withdrawn value protest under Chapter 41 of the Tax Code foreclosed any remedy under Section 25.25(d) of the Tax Code. Section 25.25 previously stated that no value correction for a property was allowed if the property was the subject of a previous protest under Chapter 41.

However, subsequent court interpretation made it clear that a property was the "subject" of a protest only if the protest was pursued to a value conclusion by the review board; a withdrawn protest did not count against the property. Section 25.25 now makes it clear that the Chapter 41 protest must be the subject of a hearing in which the owner offers evidence and the review board makes a determination in order to foreclose the late value correction allowed by 25.25(d).

Unfortunately, it may not always be possible to completely "no show" a hearing. Often, a review board will schedule all of an owner's protests or multiple protests by a consultant at the same time or consecutively. Therefore, the owner or consultant may have to be at the review board for other hearings at the same time as the protest being withdrawn.

In such situations, if possible, the owner or consultant should leave the hearing of the protest being withdrawn. Otherwise, the owner or consultant should state on the record that the protest is being withdrawn and hope that the review board does not issue any type of ruling other than one of dismissal.

Appraisal district signoffs

In some appraisal districts, the district or the review board will attempt to have the owner or consultant sign off on a document prepared by the appraisal district in order to "evidence" the withdrawal. The district or review board might even tell the owner or consultant that such a signoff sheet is "required" in order to withdraw the protest.

There is no requirement in the Tax Code for any such sign-off sheet. Often, such signoff sheets are merely attempts by the appraisal district to preclude any future protests or correction motions.

The signoff sheet presented by the appraisal district might be called a notice of withdrawal, an informal settlement sheet, or anything else. However, there is often form language included in these documents that states that the owner accepts the value, agrees to the value, or consents to the value. Sometimes, there is even language that the owner waives any future protests or corrections.

Such documents should never be signed by an owner or consultant. Even if the word "withdrawn" is handwritten on the document, the printed information could still impair the right of the owner to pursue future corrections. The fact that the owner/consultant and the appraisal district "understand" the purpose of the document as a withdrawal might not survive a challenge when the appraisal district suddenly forgets all about any "understanding."

In summary, protests can be withdrawn, but any withdrawal should be done in such a manner that is clear that the protest is not being pursued but the owner/consultant is not waiving any right to a future correction.

If you have any questions about the contents of this article, please contact the GPD Property Tax Section at propertytax@gpd.com.