Cook County treasurer's office working against taxpayers

Because Cook County, Illinois, where I live, added one percent to an already high sales tax rate, Chicagoans will soon be the sorry souls paying the nation's highest sales tax. Suburbanites like myself will pay a little less, but my sales tax rate will only be among the highest in the nation.

What do citizens like myself get in return? Not much.

Sometimes people pay too much in tax to the county, property taxes usually, and the county can't even handle that properly.

A Chicago company called Kensington Research and Recovery, a member of the Better Business Bureau, specializes in scouring public records to find cash for individuals who have overpaid their taxes, been overcharged, or for some reason or another have money owed to them from a government entity. Companies like Kensington, or the better-known Keane, are called "finder" or "tracer" firms.

Kensington mails letters to those who may have public money coming their way--and they keep half of what they find. This is completely legal. Keep in mind in many cases, the individuals who receive those letters quickly do some research on their own and collect their cash. All of it. Others hire Kensington.

Let me tell you from personal experience, getting money returned from Cook County is an onerous task. After we moved to Morton Grove in 1999, Mrs. Marathon Pundit paid the real estate tax--the bill came in the name of our home's previous owner, even though I told her that our property taxes are added into our monthly mortgage payments. Hey, I make mistakes too. And so do many of the 5.3 million residents of Cook County.

I quickly wrote a letter to the office of Maria Pappas, the Cook County Treasurer. The reply I got was something along the lines of, "Yes, you are correct. Mail a copy of the cancelled check you sent us, and we'll return your money." I did that. A month later, I got another letter, stating "We need a copy of both sides of the cancelled check." I called my bank, and they sent me the a copy of both sides--for a fee. A key point: In the first letter, the treasurer's office didn't specify they needs both sides of the check.

About four months later, we finally got our money back. It was sealed in red tape. Okay, I'm kidding about that last part.

Now you know why Kensington Research keeps half the money they collect for their clients. Dealing with government bodies can be an ordeal.

Kensington doesn't charge an "up-front fee," and if they collect no cash, Kensington doesn't charge their clients a penny.

For almost two years, until July 2007, Kensington was prevented from submitting requests to the county treasurer's office, saying "it had become overwhelmed by the number of requests." A judge now allows Kensington to submit 400 research inquiries a month.

Call me an idealist, but why can't Cook County simply notify taxpayers of overpayments? Especially since there is a five year statute of limiations to collect county overpayments.

Let me tell you about more red tape. Last Tuesday, I was summonsed for jury duty. I waited in line for a half an hour in the cold to make it past the security check so I could get into the courthouse. There are some regional county offices also in that building. The woman in line next to me, who was about sixty, was there to let the treasurer's office staff know that her mortgage was finally paid off.

That was mighty cold red tape.

NBC 5 Chicago did a story last Thursday on Kensington, one that took the politicians' side of things.

But let me remind you: Even on a relatively simple refund that was clearly owed to my wife and I, it was a major struggle to get our money back.

Illinois' State Treasurer, Alexi Giannoulias, has stepped into the fray. He told NBC 5, "Essentially, these companies are duping consumers for substantial amounts of money on property that is already theirs."

Giannoulias supports a bill that will compel firms like Kensington to disclose more information in their solicitation letters that will make it easier for taxpayers owed money, that is, to collect it on their own--for free--rather than using Kensington or some other company. As I stated earlier, often citizens do that anyway. The bill places a 10 percent finder's fee cap on the tracer companies. That may seem fair. But will the tracer firms bother to toil for a much smaller fee? And will this mean that Cook County will end up keeping more overpayments?

Let's be clear--If Cook County was doing things in a proper fashion--a foolish hope, perhaps, companies like Kensington wouldn't have to step in. Just as nature abhors a vacuum, so does the marketplace. When there is an unfulfilled need, business steps in. Particularly when the public sector fails.

There has to be a better way.

Giannoulias' office has a site where citizens can search for unclaimed property. But not for tax overpayments. The county treasurer's office site has nothing of the sort, but does note you can make tax payments at over 300 Chase Bank locations.

I'm sure Chase appreciates the plug, and the Chase logo looks real nice on the Cook County Treasurer's web site.

UPDATE 9:30PM In the comments section, WindyPundit makes a superb observation:

By comparison, I overpaid my car insurance and didn't even know it, but the insurance company mailed me a refund check automatically.

UPDATE March 20: There is a spot on the county treaurer's site to search for refunds, but it is not easy to use.

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