Challenges Confronting Parties
In Property Tax Appeals
Wayne D. Llewellyn,
2000 Municipal Assessors Institute
Wisconsin Association of Assessing Officers
paper was first presented at the 20th Annual
Legal Seminar, International Association
of Assessing Officers in Chicago, Illinois
USA on November 18 and 19, 1999 and a third
time at the September 2001 International
Association of Assessing Officers' Ineternaional
Conference on Assessment Administration
in Miami, Florida USA.
|(Property taxes) can be likened to
the human involuntary nerve system:
we all enjoy its benefits, from the
cradle to the grave, but we are apt
to ignore it in everyday life, and
then be surprised when our neglect
results in its failure. We must think
of the 'physiology' and the 'pathology'
of (property taxes) in the same way.
Adapted from the words of the
late Keizo Shibusawa, first chairman
of the Japan Real Estate Institute
The goal of this paper is to share several experiences to assist in wrestling
with the general question of ethical challenges confronting parties in
property tax appeals. This is an interesting topic and the multiplicity
of issues makes it significantly more complicated than it first appears.
The single most important challenge facing all participants in a property
tax appeal is to put the system of property taxes ahead of our personal
interests and the interests of our customers. The fact that taxes can be
shifted unknowingly from one individual to another requires that the public
interest supercede other interests. Several subordinate objectives of this
|Ψ sensitizing readers
to ethical issues in property tax appeals,
|Ψ generating discussion
of ethical differences in such matters,
|Ψ improving abilities
to analyze and resolve ethical dilemmas,
|Ψ promoting awareness
of personal and professional responsibilities,
|Ψ Identifying factors
that contribute to an ethical environment
in property tax appeals.
|Clear Definitions of
Right and Wrong
Regardless of our profession, upbringing, religious belief and other social
characteristics it is fair to say that there is widespread agreement on
what is generally right and what is wrong. The following qualities which
can be likened to ethical behavior or moral conduct - dutiful, excellent,
faithful, good, honest, honorable, incorruptible, just, pious, religious,
right, righteous, true, upright, virtuous and worthy. Unethical behavior
or immoral conduct can be characterized by terms such as bad, corrupt,
criminal, depraved, dishonest, dissolute, evil, loose, profligate, sinful,
unprincipled, vicious, vile, wicked or wrong.1
Ethical issues cannot always be defined in purely black and white terms
given our tendencies to balance individual and public interests. The
debate over what constitutes unethical practice in property tax appeals
often can relate to issues that fall between the extremes in interests.
Adding professional responsibilities to the concerns to be dealt with
further complicates the matter. The ethical dilemma, or selecting between
competing choices, arises when it can be argued that several positions
In determining right from wrong, we know it is wrong to steal, lie, cheat
and so forth. However, in right versus right decisions, it can be argued
that it is fair for an individual to want to pay as little taxes as possible
in their efforts to pursue their individual interests. It is also right
for each of us to ensure that others are also paying their fair share
From a professional perspective, it is right to provide advice and guidance
that results in taxpayers paying no more than their fair share. It is
also right that as professionals we advocate that individuals also pay
no less than their fair share. This position potentially places property
tax professionals at odds with clients.
It is wrong to simply advocate or only work toward lower assessments.
This position is reinforced by the requirements of the Uniform Standards
of Professional Appraisal Practice and is consistent with the policy
statements of the International Association of Assessing Officers that
holds market value as the value standard for property. It is right to
work toward the fair distribution of taxes.
Unethical Behavior in Property Tax Appeals
Is Tantamount to Stealing
Property taxes are used to fund government and our 'civilized society'
and are distributed based on the value of property. If one property is
incorrectly valued too low, the property tax not paid by that property
is picked up by other properties that are valued either correctly, or
that are valued too high.
Many owners of property never get involved in a property tax appeal and
many do not understand the concept of incidence in taxation. In a property
tax appeal unethical conduct resulting in a shift in taxes can therefore
contribute to taking something from someone else without them knowing
it, or without their permission.
For example, in many residential property tax appeals, the amount that
can be shifted to other properties incorrectly may be only pennies. If
a $100 'tax break' is given to a property owner in a jurisdiction with
10,000 parcels, the shift in taxes is $0.01 to all other residential
parcels, on average. However, if a major downtown property in a municipality
with 10,000 properties is under-valued resulting in $100,000 fewer taxes,
the remaining properties in that tax class pay, on average, $10 more.
To say that the amount shifted is equivalent to only a few pennies or
is negligible is wrong. Proper conduct and adherence to professional
principles should be required 100% of the time. If it is acceptable to
shift 0.0001% of the tax burden to someone else, then it is also acceptable
to have 3 jet plane crashes annually at Chicago's O'Hare Airport. While
this illustration may stretch the point, it is nevertheless improper
to knowingly advocate for an incorrect assessment.
The fact that there can be any incidence in tax demands that that all
parties in a property tax appeal act in a manner that is beyond reproach.
Also, it is this fact that requires all parties in a property tax appeal
to place the greater public interest ahead of the interest of an individual
taxpayer, a municipality or any other customer. The parties include the
complainant, respondent, sitting member(s) of the panel hearing a complaint
or appeal and the property owner(s) and agents.
A moment considering the human tendency for greed and competition is
worthwhile to test the extent to which we will go to gain more than we
need or deserve. Each of us can only answer the following questions personally.
Should we all become or be so incredibly selfish that we push others
to pay our way through personal or corporate tax advantages? At what
point do we stop arguing for more? At what point can we individually
justify placing a disproportionate share of property wealth on someone
else? On whose shoulders should the pennies fall?
If we take the view that having enough is not nearly enough for us to
have all that we want, then the system breaks down and chaos begins.
Even though the needs of the individual must be balanced against the
need to fund public operations through taxation of any form, the nature
of tax incidence places parties to property tax appeals in a position
of trust. That fiduciary responsibility is one that should not be ignored,
particularly by professional advisors.
Societal Issues and Changes Related to
Every day there are millions of business people that trust others with
whom they work and serve without really giving it much thought. If we
could not trust others, it would become virtually impossible to do business
at all. The concept of ethics is not new and we have come to make the
assumption that others share roughly the same moral norms as we do. With
this in mind it is easier to make predictable, generally sound decisions
in the interest of doing what is right.
This assumption developed in a world that shares similar beliefs in what
is right and what is wrong and a system of moral development through
our families, schooling, institutions and society. In the last twenty
or thirty years though there have been several significant developments
that impact our definitions of ethical conduct.
The 'me first' attitude in North American society has grown out of the
seventies and eighties. This has resulted in some individuals disregarding
moral systems and advancing their individual interests at the expense
of others with whom they share communities, work or do business with.
The pressures and opportunities for unethical action have increased with
that particular change in society.
Part of the 'me first' attitude can be attributed to pressures beyond
control of the individual. Pressures for unethical action also include
increased global competition, unending demands for high level, short
term return on investment and the popularity of "lean and mean" management
Institutions devoted to the study of ethics argue that opportunities
for getting away with unethical actions have also increased. New and
complex business technologies, regulatory activities and definitions
of property have created many ethical gray areas in the property tax
world. These conditions have created openings to pursue legal, but unethical
courses of action. Defining benevolent activities, what constitutes religious
activities and so forth are among the examples of areas where minorities
are given preferential property tax treatment.
A Clear Cut Case for Defining Ethical
and Unethical Conduct
Rushworth M. Kidder2 ,
president for the Institute of Global Ethics argues that ethics are universal
and that they are essential to our survival into the next millennium.
The universality of ethics is illustrated by several examples.
He states that we have fallen into the trap of believing in arguments
that there are no absolutes, common values, standards, or core set of
moral ideas that can be shared. To make the point, consider the example
of a school setting where it is decided to teach ethics to students and
someone in the room asks 'Whose ethics will be taught?' The inquiring
party states that if ethics are taught, it is objectionable that the
values held by someone else would be imposed on their child. This argument
fails on the grounds that there is generally agreement on several fundamental
forms of ethics whether in professional or personal lives.
Kidder holds that ethics can be as absolute as concepts such as the speed
of light, the value pi and that gravity will always pull an apple toward
the earth. The analogy used is that if you were parachuted into a foreign
country and you walked up and took something from the first person you
saw, they would object to that conduct. Basic moral concepts can be taught
in various cultures, peoples and professions.
In another example, Kidder uses the situation where our senses of dignity
and compassion keep us from entering a supermarket and just as an elderly
person is about to put their hand on the last shopping cart you rush
up, take the cart and move down the aisle with it. There is no law that
says you shall not steal shopping carts from elderly people. However,
it is fair to say that we all know that taking shopping carts from the
elderly is not a nice thing to do.
Kidder concludes by saying that there is only one set of values and that
to have two or more is to invite contradiction and double standards.
It is on the basis of this argument that the public interest must be
put ahead of individual interests in property tax appeals. It is worthwhile
to note that imposed regulations are the law and self-regulation defines
our ethical conduct. In this respect it would be fair to say that ethics
are above the law.
The one test put forward to test for ethical and unethical conduct is
consideration of The Golden Rule. That rule simply means that we should
treat people the way we want people to treat us. Kidder argues that unethical
conduct can be detected by this simple, but effective rule. This is true
in a property tax appeal where the interests of customers, whether they
are the municipality or the individual taxpayer, must be put behind the
interests of all other members of the taxpaying public.
Blurring the Lines Between Ethical and
The lines between ethical and unethical conduct are easily blurred when
individual or minority interests are contrasted against public interest.
The development of the societal notion that all taxes are bad has resulted
in the position that everyone is entitled to pay the minimum amount of
tax, regardless of how it is achieved. Strict adherence to this principle
can only result in advocating for something that is wrong despite the
position that unethical conduct is tantamount to theft. In most cases,
the need to balance private and public interest in property taxation
is the root of disagreement.
Revisiting Contingent Fees
To illustrate the blurring of the lines, private interest can include
arguments that an appraiser or attorney is entitled to make a living
and that contingent fees provide a justifiable means for that. A recent
reprinting of an article by the Appraisal Institute of Canada's Canadian
that there compelling arguments against the use of contingency fee
agreements. The article presents a comparison between the legal profession's
use of contingency fees and the appraisal profession adhering to a
fee for service.
As part of the discussion surrounding contingency fees, it is argued
that that such an arrangement is far beyond a form of risk sharing agreement.
A contingency fee is further defined as any arrangement where a person
offering to perform a task or service does so on the basis of being compensated
only if there is success in obtaining a benefit for the person for whom
the work or service is being performed. In presenting a description of
what a contingent fee really does, the position of the courts is also
It is contended in this article that the courts disapprove of conduct
that has the effect of encouraging litigation. Given its adversarial
nature, litigation is considered evil and promotes strife in society.
Two terms are introduced to further the discussion of contingency fees
i.e. maintenance and champerty.
Maintenance is defined as improperly stirring up litigation by giving
aid to one party without just cause or excuse. Champerty is described
as a form of maintenance when one person maintaining for another takes
part of the property under dispute as his own reward. Offering contingency
fee agreements can be likened to champertous action to the extent that
a property tax appeal is filed for the purpose of generating unjustifiable
The authors present three reasons why contingency fees, or champerty,
should be rejected:
|First, the most compelling
argument against the use of contingency
fees is that they create inherent conflicts
of interest. Given that the professional
must win, there is the temptation to
go beyond the bounds of fair play and
|ΨSecond, the client may
be paying substantially more than would
normally be achieved had a fee for
services been paid to the professional.
Had the client paid a contingency fee
similar to a fee for service, then
a contingency fee is meaningless. Also,
if the contingency fee was less than
a fee for service, there is no guarantee
that the services rendered were at
a particular standard.
|ΨThird, one reason used
by the legal profession to justify
the use contingency fees is that poor
members of society cannot have their
concerns addressed through an expensive
legal or judicial system. Given the
amount of property taxes relative to
the total value of property in virtually
any jurisdiction in the world, it seems
that this argument also has no place.
|The contingency fee can only have a negative
effect on the real estate professional's
objectivity and impartiality. Similarly,
there also appears to be some question whether
the objectivity of members of the legal profession
can be assured when the question of contingent
fees arise, particularly in property tax
and Public Interests
Ethical conduct, like taxes, is a precondition for the preservation of
a civilized society. As stated earlier, despite differences, there is
generally wide spread understanding of what is right and what is wrong.
There are some minor differences between the United States and Canada
that can influence perceptions of ethical and unethical conduct. The
American political system is predicated on 'Life, Liberty and the Pursuit
of Happiness.' Individuals are entitled to be a member of the human race,
to be politically free and depart from normal rules or procedure (within
reason) and to chase satisfaction based on ones own goals. The Canadian
equivalent is 'Peace, Order and Good Government.' In Canada, individuals
are entitled to freedom from civil disturbance and oppression; systematic
regulations and arrangements; and advancement of prosperity or health
(e.g. the good of the community) through the exercise of authority over
the performance of functions for a political unit.
Despite the differences, practice throughout North America has generally
been that ethical and unethical practices generally fall within the more
clear cut definitions of right and wrong contained in the introduction
to this paper. In both countries it is clearly wrong to take something
that belongs to another without permission (i.e. to steal). It is also
wrong to lie and cheat. Several situations where it is more difficult
to prove unethical behavior, or where we as individuals have not always
had the courage to stand up and say the practice is wrong, can be categorized
into areas of unprincipled conduct and conflict of interest.
Unprincipled conduct is that which is by general opinion, or custom,
considered to be immoral, unethical or dishonorable. It is any action
that violates an ethical code of a race or profession.
Our society depends on property (and other forms) taxation to fund government.
Further, given the possibility of incidence in taxation, there is a fiduciary
responsibility placed on all involved in a property tax appeal to operate
in the public interest rather than in the interests of the individual.
Operating in the public interest requires an objective standard for the
delivery or taxes. The market value of property is the only objective
standard for the distribution of property taxes4.
A conflict of interest therefore occurs when we place the interest of
the individual ahead of the public interest.
The basis for determining what is right or what is wrong is often clouded
by the competition that occurs for the public good and individual interest.
In a property tax appeal, the individual interest is usually the desire
to pay as few taxes as possible. The public interest should be limited
to ensuring each member of society pays only its fair share relative
to all other members of society.
Ethical Rules of Various
The appendix contains selected excerpts on ethical considerations from
IAAO's Standard on Property Tax Policy; the Uniform Standards of Professional
Appraisal Practice promulgated by The Appraisal Foundation, the American
and Canadian Bar Associations and the American Judiciary.
The footnotes to this paper also indicate various associations that have
developed rules that outline the nature of their profession and how their
codes of professional conduct are designed to protect the public. There
are codes of ethical conduct for librarians5 ,
bartenders, planners7 ,
financial managers and accountants9 ,
physical therapists 12 .
These associations, along with lawyers, appraisers and the judiciary
have several similarities. The similarities include:
|Working to preserve the
public trust and gaining credit for
their peers, the organization to which
they belong and themselves by acting
with integrity and honesty.
|Maintaining a professional
level of competence for the performance
|Disclosing actual and
potential conflicts of interest and
limitations in experience and analyses.
through impartiality; independence;
providing full, clear and accurate
information and opposing censorship
and professionally unfounded restrictions.
arrangements with and acting as faithful
agents for clients or employers unless
disclosure is required by law or the
greater public interest.
colleagues by respecting their opinions,
reputation, knowledge and expertise.
|Presenting personal and
corporate qualifications, education
and experience accurately.
|Providing safe working
environments, appropriate acknowledgements,
opportunities for professional growth
and development, clearly defined responsibilities
and fair and equitable conduct with
clear lines of communication for employees
|Signing and taking responsibility
for work prepared or supervised.
|It is fair to say that there is a very
clear emphasis on the role of the professional
and their obligation to others which is taken
to mean putting the interests of the public
ahead of our own.
|Examples of Unethical
Numerous individuals were interviewed over the last six months and asked
for examples of unethical conduct in property tax appeals. Consider the
following examples that were provided. These have been classified based
on a lack of subscription to principles and as a conflict of interest.
|Conduct with No Principles
In virtually all of the examples, a lack of full and complete disclosure
is obvious. The lack of disclosure of all facts and evidence is the most
obvious form of unprincipled conduct.
||A very common complaint
included not fully disclosing all of
the facts by both the complainant and
the respondent, particularly when the
facts are known. Simply acting in a
manner with the sole goal to reduce
property taxes and not fully disclosing
all of the facts regardless of how
damaging those facts may be personally,
or to a client, can influence the outcome
of an appeal hearing. For this reason,
the requirement of appraisers to perform "assignments
with impartiality, objectivity, and
independence, and without accommodation
of personal interest13" and
to report on what was done is justified.
In property tax appeals particularly,
this requirement could also be extended
to members of the North American Bar
|| In another case, an
employee of an assessment jurisdiction
knows an assessment is wrong due to
a difference in property coding and
that if it is recommended to an appeal
tribunal that the assessment be corrected,
it will cost the jurisdiction $500,000
in taxes. By not revealing the nature
of the error, the assessment could
be corrected for the following year
and the current 'tax-hit' avoided.
The individual property owner has clearly
had something taken away without knowledge.
|| Working within the rules
when it is obvious that the rules are
wrong and there is sufficient latitude
to arrive at a fair and equitable assessment
is another example of knowingly shifting
the tax burden to some other unknowing
party. Consider an employee of an assessment
jurisdiction that has regulated rates
to use in the valuation of property.
Those rates produce varying levels
of assessment depending on how properties
are stratified or grouped. If it is
obvious and readily demonstrable that
a group of properties is unfairly assessed
relative to another group, the assessment
jurisdiction has several choices. The
preferred choice would be to adjust
all property groups to the same level
as far as reasonably practical. At
a minimum, the jurisdiction should
acknowledge the inequity and act as
an advocate for change.
|| An appellant in an appeal
matter wrote to the solicitor of the
municipality and stated "
performance demonstrates you have conduct
over nothing other than the lying department
" and further "
. I have
little tolerance for any L.L.B., and
I am not referring to the City's lying
little bastards." A letter was
also written to the assessment review
board on the same date in reply to
a notice of decision "Your letter
is only further confirmation of the
blatant and inherent oneness of the
Assessment Review Board and the City
The chair of the assessment review board was requested by counsel
for the jurisdiction to comment on the foregoing behavior and stated
in his decision that he did not want to get involved in the personal
grudge match. In this example, not only was the appellant's behavior
unacceptable, the chair should have disclosed his thoughts on the
|| One appraiser reported
deliberately failing to look at the
assessments of similar properties known
to have considerably lower values that
the subject property before heading
to the appeal tribunal. When attending
the appeal tribunal the assessor's
representative wanted to avoid having
to speak to the differences by saying
that an inspection of the comparable
properties was not undertaken but that
the assessment to market relationships
were to the best of her knowledge fair.
|| Several individuals
report attending hearings with 'professional
boxers'. These are the people that
know that they have already won the
fight. However, taking the extra shot
when it is unnecessary to do so was
this individual's greatest victory
in hopes of a smaller final assessed
value and lower tax bill.
|| During an appeal hearing
a very prominent citizen received a
'better than average' hearing of unsubstantiated,
uncorroborated evidence related to
the market value of property in an
area where that citizen resides. The
review board allowed politics into
what should be an objective process.
|| A series of provincial
government notices, advisories and
instructions to assessors were issued
from 1994 to 1997 on the use of stratified
ratio studies to prepare equalized
assessments for municipalities. A member
of a provincial government department
while defending an equalized assessment
responded with "No" to the
following question "Does stratification
play any part in the equalization process?"
|| During an appeal hearing,
several key facts were held back to
improve the chances of an assessment
reduction. For example, the cost of
a brewery reported at $16 million in
a recent newspaper announcement was
not included in a complaint where the
complainant requested a value of $5
million compared to $7 million on the
assessment notice. Disclosure of sales
evidence is critical to both sides
of a property tax appeal.
|| Several individuals
had left the employment of an assessment
jurisdiction after preparing the assessments
on hundreds of properties. The knowledge
associated with the assessments that
were prepared was then later used to
attack assessments they had prepared.
|| Appraisers are frequently
requested by their clients to use exactly
what their client provides in terms
of income statements and other basic
economic data. Clients misunderstanding
the nature of proper research or appraisers
acquiescing to the requests of clients
to rely on questionable data or information
place an appraiser in a tenuous position.
|| Defending an assessment
that is on a "fence line." Market
areas are frequently established based
on subjective judgement and can involve
rigid geographic lines. When this occurs,
models developed right across the street
for very similar properties can have
significantly different assessed values.
|| Informal appeal tribunals
have been accused of treating appraisers
like 'journalists' and allowing the
fabrication of stories, the creation
of feeding frenzies and do not thoroughly
test whether sources have been checked.
Appraisers cannot, and should not,
fabricate facts that should be based
on real world facts in the market place.
|| The citizen (or their
agent) requests information and data
that can only be used to advocate their cause
... rather than requesting data that
demonstrates the fairness and equity
or the accuracy of the final value.
|| In numerous situations
it was reported that the sole purpose
of the complaint or appeal was to have
the assessment reduced rather than
arriving at a fair or correct assessed
value. Obtaining a lower amount of
tax dollars paid was the sole objective.
|| The parties should be
able to competently deal with the issue.
Individuals with no experience in the
valuation of properties for the purpose
of taxation are being accepted as experts.
The foregoing examples illustrate two
extremes inappropriate conduct. One extreme
is outright commission or misrepresentation
with outright omission at the other end
of the scale. In between these two extremes
falls a third classification of half-truths.
Members of the legal, appraisal and judicial
professions must hold themselves to the
highest possible standard in order to generate
public confidence and trust in the property
Examples of Conflict
The concept of conflict of interest can be viewed from two perspectives.
The first is a clash between public interest and private interest. The
second is in cases where the individual is obviously biased.
||An appointed member of
an assessment review board, who is
also an accredited appraiser, had completed
an appraisal report intended to negotiate
a tax settlement with the municipality.
The review board member began using
and relying on the report he had prepared
while the board was considering the
valuation of that property.
||Several individuals had
left the employment of an assessment
jurisdiction after preparing assessments
on hundreds of properties. The knowledge
associated with the assessments that
were prepared was then later used to
attack the assessments they had prepared.
||Another individual accepted
employment with an assessment jurisdiction.
While employed by that jurisdiction,
the individual continued to work for
private clients to challenge assessments
that he was also now responsible for
defending. The employer had allowed
this to occur as part of the employment
||A member of an Assessment
Review Board appointed by a Municipal
Council in Alberta had the following
to say while inquiring into his own
assessment during the period in which
complaints may be filed against an
"It is obvious that the entire system
is flawed and that the assessed values
struck by the assessment department are
not realistic. Please provide all data,
reasoning... that demonstrate..."
In property tax appeals some may argue
that the evasion of taxes through any means
is ethical because the government does
not ask to take our hard earned dollars.
The government just takes them. This is
a fundamentally flawed proposition. Governments
do ask for our tax dollars in terms of
the amount of tax it will take based on
measures of ability to pay, such as the
value of property.
Property appraisal and litigation involves making decisions. It is hoped
the following will assist in avoiding falling into traps that could
be classified as unethical behavior. According to researchers at Texas
A&M University, the ten most common decision traps14 are
||Plunging In -- Information
is gathered and conclusions are reached
without understanding the critical
point of the issue.
In most property tax appeals, the issue should be what is the market
value of the property.
||Frame Blindness --
Solving the wrong problem because
of a created mental framework for
In many property tax appeals, the problem is often discontent with
the amount of taxes paid rather than the valuation of the property.
||Lack of Frame Control
-- Failing to define the problem
in multiple ways or being influenced
by previous frames.
In addition to taxes paid, complaints can often relate to services
received rather than what is the value of the property.
Your Judgment -- Failing to collect
information because you are sure
of your assumptions and opinions.
Each property is unique and requires a degree of individual analysis.
In any circumstance and particularly when the assignment involves
attending an appeal tribunal, whether under oath or not, assumptions
and opinions should be supportable.
-- Relying on "rules of thumb," such
as trusting convenient facts and
readily available information.
Relying on published studies and not undertaking adequate analysis
of the property under appeal are examples of this potential trap.
||Shooting From the
Hip -- Making spontaneous decisions
rather than following a systematic
Unsubstantiated adjustments, poor analysis and advocating for a quick
decision are examples.
||Group Failure -- Failing
to manage the group decision-making
process because of the assumption
that the group will make good decisions.
Over-reliance on other members of the team to deal with technical
issues or ensuring proper procedure is followed can be disastrous.
||Fooling Yourself About
Feedback -- Failing to accurately
interpret the evidence from the past.
Not considering previous decisions, the success of previous actions
or the familiarity of tribunal members can be a mistake as much as
not considering judgements regarding past sales transactions.
||Not Keeping Track
-- Relying on experience, and therefore
failing to keep track of results
of decisions and to evaluate those
Keeping records of successful actions and strategies that work can
assist in preparing for future appeals.
||Failure to Audit the
Decision Process -- Failing to create
an organized approach to understanding
your own frame.
Structured analysis is part of good analysis.
Professional and Global Ethics
Larry Colero15 of
Crossroads Programs Inc. provides a framework for classifying ethical principles
that can be applied to various cultures, philosophies, faiths and professions.
Crossroad programs is part of the University of British Columbia's Center
for Applied Ethics that was created in 1993 as an independent unit in the
Faculty of Graduate Studies. It is primarily an interdisciplinary research
center that studies a diverse range of topics, including health care practices,
business and professional procedures, new information technologies and
environmental issues. Colero contends that ethical dilemmas can be likened
to noticing a snake after you have been bitten and that unethical conduct
can be based on searching for signs that a snake might be present. The
signs have been organized into three categories: personal, professional
and global ethics.
Principles of Personal Ethics
Personal ethics are similar to morality and reflect general expectations
of anyone in any society, acting in any capacity. These are the principles
we try to instill in our children, and expect of one another without needing
to articulate expectations or formalizing them in any way.
Principles of Professional Ethics
Individuals acting in a professional capacity have an added burden of ethical
responsibility. Professional associations have codes of ethics that prescribe
required behavior within the context of a professional practice such as
property appraisal, medicine, law, accounting, forestry or engineering.
These written codes provide rules of conduct and standards of behavior.
Principles of Global Ethics
Each of us influences the world by being a part of it. It is wise to think
in global terms if the property tax is to gain and even maintain credibility.
Added accountability is placed on globally influential enterprises such
as governments and international corporations and societies. (Responsibility
comes with power whether we accept it or not.)
Concern for the well-being
(as reflected in international laws)
Respect for the autonomy
Openness; full disclosure
Society before self
/ social responsibility
Trustworthiness & honesty
with the law (with the exception
of civil disobedience)
Due diligence / duty
of care v Interdependence & responsibility
for the "whole"
Basic justice; being
fair v Fidelity to professional responsibilities
Reverence for place
Refusing to take
or apparent conflict of interest
Individuals in property tax appeals are
leaders that should ultimately attempt
to influence society and world affairs
in a positive way. It is also another example
of the importance of placing the public
interest and the total system of taxation
ahead of our personal interests or the
interests of our individual clients. Modern
and complete ethical models should consider
the impact of actions on humanity.
All of us have experiences dealing with ethics. It is up to each of us
to be our own best judge of our own behavior in light of what we want
the property tax to be. We all know that there are standards against
which any person can be judged. Deviation from standards is only one
basis for others to perceive us as being unethical or immoral.
Ethical behavior and compliance with standards can be likened to individual
sports. We all assume responsibility for our own affairs and want to
Consider ethical behavior compared to the challenges of a veteran skier.
Expert skiers take on mogul fields as part of the ultimate skiing experience.
A mogul is a rounded lump of snow usually encountered in situations where
many other expert skiers have gone before. Navigating each turn means
you can't cheat in terms of skills and ability. The skier requires good
balance and other essential techniques to carve through differing terrain.
The more that balance can be maintained through each turn, the easier
it is to turn. The same is true in a property tax appeal.
We all want to take on challenging assignments such as property tax appeals
and encounter obstacles such as client demands, lack of information and
competition between public and individual interests. Meeting these challenges
by being appropriately prepared, ensuring full disclosure and holding
public interest ahead of the interest of our clients and customers will
make it easier to determine which decision should be made.
One final word on this topic is that every effort should be taken to
educate the general public on the value of property taxes to our society.
Rather than working toward unending exemptions or property valuation
practices that favor one property class over another, society would be
well served by education directed at fairness and equity in taxation
rather than contributing the smallest possible amount to the cost of
Fairness, impartiality and an even-handed approach are essential to the
future of the property tax. Staying at arms-length from our client's
interests and being fair to all taxpayers and society are highest on
the list of challenges confronting parties in property tax appeals.
American Bar Association
Excerpts from the American Bar Association16 are
. As intermediary between clients, a lawyer seeks to reconcile their divergent
. A lawyer should use the law's procedures only for legitimate purposes
and not to harass or intimidate others. A lawyer should demonstrate respect
for the legal system and for those who serve it, including judges, other
lawyers and public officials. While it is a lawyer's duty, when necessary,
to challenge the rectitude of official action, it is also a lawyer's
duty to uphold legal process.
. a lawyer is also guided by personal conscience and the approbation
of professional peers.
. Virtually all difficult ethical problems arise from conflict between
a lawyer's responsibilities to clients, to the legal system and to the
lawyer's own interest in remaining an upright person while earning a
. The profession has a responsibility to assure that
its regulations are conceived in the public interest and
not in furtherance of parochial or self- interested concerns
of the bar.
Lawyers play a vital role in the preservation of society.
A lawyer shall not bring or defend a proceeding, or assert or controvert
an issue therein, unless there is a basis for doing so that is not frivolous,
(a) A lawyer shall not knowingly:
(2) fail to disclose a material fact to tribunal when disclosure is necessary
to avoid assisting a criminal or fraudulent act by the client;
(3) fail to disclose to the tribunal legal authority in the controlling
jurisdiction known to the lawyer to be directly adverse to the position
of the client and not disclosed by opposing counsel; or
(d) In an ex parte proceeding, a lawyer shall inform the tribunal of
all material facts known to the lawyer which will enable the tribunal
to make an informed decision, whether or not the facts are adverse.
Canadian Bar Association
The Canadian Bar Association has a (emphasis added) similar code
of ethics17 to
the American Bar Association with some differences.
The legal profession has developed over the centuries to meet a public
need for legal services on a professional basis
. lawyers and the quality of the service they provide must command the
confidence and respect of the public
. the desire for the respect and confidence of the members of the society
which he serves and of the members of his profession should motivate
him to maintain the highest possible degree of ethical conduct.
. The principle of protection of the public interest will serve to guide
the reader to the true intent of the Code.
3. Illustrations of conduct which may
infringe the Rule (and, often, other provisions
of this Code) include:
(c) making untrue representations or concealing material facts from
a client with dishonest or improper motives;
(d) taking improper advantage of the youth, inexperience, lack of
education, un-sophistication, ill health, or un-business like habits
of a client;
(h) failing to be absolutely frank and candid in all his dealings
with the courts, his fellow lawyers and other parties to proceedings, subject
always to not betraying his client's cause, abandoning his legal rights
or disclosing his confidences;
(i) failing, when dealing with a person not legally represented, to
disclose material facts, e.g. the existence of a mortgage on a property
being sold, or by supplying false information, whether he is professionally
representing a client or is concerned personally;
1. The advocate's duty to his client "fearlessly to raise every
issue, advance every argument, and ask every question, however distasteful,
which he thinks will help his client's case" and to endeavour "to
obtain for his client the benefit of any and every remedy and defence
which is authorized by law"-' must always be discharged by fair
and honourable means, without illegality and in a manner consistent with
the lawyer's duty to treat the court with candour, fairness, courtesy
The lawyer must not, for example:
(b) knowingly assist or permit his client to do anything which the
lawyer considers to be dishonest or dishonourable;
(d) endeavour or allow anyone else to endeavour, directly or indirectly,
to influence the decision or action of a tribunal or any of its officials
in any case or matter, whether by bribery, personal approach or any means other
than (by) open persuasion as an advocate;
(e) knowingly attempt to deceive a tribunal or influence the course of
justice by offering false evidence, misstating facts or law, presenting
or relying upon a false or deceptive affidavit, suppressing what ought
to be disclosed, or otherwise assisting in any fraud, crime or illegal
(g) knowingly assert that for which there is no reasonable basis in
evidence or the admissibility of which must first be established;
(h) deliberately refrain from informing the tribunal of any law or
jurisprudence which he considers to be directly in point and binding
on the tribunal and which has not been mentioned by his opponent;" dissuade
a material witness from giving evidence or advise such a witness
to absent himself;
Judicial Conference of the United States
Judicial Code of Conduct
The code of conduct(emphasis added) of the Judicial Conference
of the United States18 applies
to all federal judges but is only advisory and non-binding on Supreme
Court justices. The rules explicitly permit judges to accept and participate
in awards programs and to receive certain benefit from legal publishers.
Below are the official canons, followed by excerpts of commentary provided
by the Judicial Conference.
Canon 1: A judge should uphold the integrity and independence of
the judiciary. ("Public confidence in the impartiality of the judiciary
is maintained by the adherence of each judge to this responsibility.")
Canon 2: A judge should avoid impropriety and the appearance of impropriety
in all activities. ("A judge must expect to be the subject of
constant public scrutiny. A judge must therefore accept restrictions
that might be viewed as burdensome by the ordinary citizen and should
do so freely and willingly.")
Canon 3: A judge should perform the duties of the office impartially
and diligently. ("A judge shall disqualify himself or herself
in a proceeding in which the judge's impartiality might reasonably be
questioned, including but not limited to instances in which the judge
has a personal bias or prejudice concerning a party ... ")
Uniform Standards of Professional Appraisal Practice
The following excerpts19 from
the Uniform Standards of Professional Appraisal Practice (USPAP) are
directed at the practice of property appraisal in the United States.
In Canada, the Appraisal Institute of Canada has adopted USPAP guidelines.
Apart from that, only members of the International Association of Assessing
Officers through their membership with IAAO are bound to comply with
. The intent of these Standards is
to promote and maintain a high level
of public trust in professional appraisal
It is essential that professional appraisers develop and communicate
their analyses, opinions, and conclusions to intended users of their
services in a manner that is meaningful and not misleading.
. These Standards
. (set) forth the requirements for integrity, impartiality,
objectivity, independent judgment, and ethical conduct
To promote and preserve the public trust inherent in professional appraisal
practice, an appraiser must observe the highest standards of professional
An appraiser must perform assignments ethically
and competently in accordance with these standards,
and must not engage in criminal conduct.
. (and) perform
assignments with impartiality, objectivity, and independence,
and without accommodation of personal interests.
An appraiser must not accept an assignment that includes the reporting
of predetermined opinions and conclusions.
Whenever an appraiser develops an opinion of value, it is unethical for
the appraiser to accept compensation in developing that opinion that
is contingent upon:
1. the reporting of a predetermined value, or
2. a direction in value that favors the cause of the client, or
3. the amount of the value opinion, or
4. the attainment of a stipulated result, or
5. the occurrence of a subsequent event directly related to the value
Excerpts from IAAO's
Property Tax Policy Standard
4.4 Appraiser Qualifications
Ensuring a high-quality valuation system requires highly skilled and
trained professional staff. Assessors may need legislative direction
or administrative rules and regulations to ensure that this objective
can be promoted and achieved. Accordingly, states and other governments
have implemented legislation requiring practitioners in all branches
of property appraisal to demonstrate appropriate qualifications before
being allowed to practice independently, to maintain and improve their
skills used in the course of practice, and to conduct themselves in accordance
with the Uniform Standards of Professional Appraisal Practice (USPAP)
and equivalent standards that may be in place outside the United States.
Such legislation may establish different qualifications depending on
the type or value of property to be appraised and the purpose of the
appraisal. Some states require assessing officers to obtain a license,
certification, or professional designation (such as the IAAO Certified
Assessment Evaluator [CAE] or designations awarded by states and other
professional societies). Legislation regulating independent appraisers,
such as fee or contract appraisers, should be coordinated with legislation
affecting assessing officers. When similar qualifications are indicated,
transferability of experience, credentials, and course credits should
be permitted. Objective standards should be developed and used to evaluate
experience, credentials, and education.
Appeals can function as part of the external quality assurance program
of an assessing jurisdiction. Often, problems that may extend beyond
the property on which the appeal is filed will be uncovered and potentially
serious inequities quelled. Assessment personnel should view the appeals
process as a positive element of quality assurance in the assessment
4.6.1. Appeals Systems
Appeals systems should be designed to facilitate the taxpayer's right
to appeal. To do this, the process should be clearly spelled out in
a written brochure or other document that can be given to the taxpayer.
Before filing a formal appeal, the taxpayer should have an opportunity
for informal discussion, which may resolve many issues and may even
obviate the need for the appeal to proceed. To the extent practical,
the taxpayer should have access to all records pertaining to the valuation
of the property in question. Each assessing officer should become familiar
with statutory requirements that may make some of this information
confidential. Aside from such restrictions, information should be willingly
and openly shared and this sharing should include information on sales
used as comparables. (See Standard on Assessment Appeal [IAAO 1981].)
4.6.2 Planning and Staff Allocation
Adequate resources must be provided to defend values. The need for response
to appeals typically increases during reappraisal years or periods
with rapid property value inflation. Proper planning and staff allocation
must be done to ensure sufficient resources to address anticipated
higher than normal numbers of appeals.
4.6.3 Taxpayer Representation
Appeals typically involve two types of assessment issues: appraisal and
legal. Individuals trained and educated in ad valorem tax procedures
are considered qualified to provide professional representation for
taxpayers in the early stages of the appeals process, provided that
appraisal issues are the focal points. Such representation does not
constitute the unauthorized practice of law. Valuation questions often
involve legal issues. When issues of law are in question, trained legal
practitioners must be employed by both the taxpayer and the assessing
|Readers can visit http://www.reinet.or.jp/index-e.htm for
the complete text published by the Japan
Real Estate Institute.
||See definitions Webster's Ninth
New Collegiate Dictionary, Thomas
Allen & Son Limited, Markham
||See http://www.globalethics.org/corp/keynotes.html for
a complete copy of the manuscript.
||See The Canadian Appraiser, Summer
1999. The Contingency Fee: A New
Dimension, A New Victim, Graham Allen
and Devon Carbol, Appraisal Institute
of Canada, Winnipeg, Manitoba.
||See International Association of
Assessing Officers, Policy Statements,
1996. Chicago, Illinois.
||See http://www.ala.org/acrl/guides/rarethic.html Standards
for Ethical Conduct for Rare Book,
Manuscript, and Special Collections
Librarians, with Guidelines for Institutional
Practice in Support of the Standards
and The Code of Ethics of Slovenian
Librarians adopted at the Library
Association assembly at Bled, November
||See http://www.massey.ac.nz/~NZSRDA/nzssorgs/nzasa/ethics.htm for
the Association of Social Anthropologists
of Aotearoa/New Zealand (formerly
New Zealand Association of Social
||See http://www.rain.org/~calapa/ethics/a.html for
the American Planning Association.
||See http://www.mindspring.com/~wheaton/Ethics.html for
the American Cultural Resources Association
||See http://www.rutgers.edu/Accounting/raw/ima/imaethic.htm for
PRACTITIONERS OF MANAGEMENTACCOUNTING
AND FINANCIAL MANAGEMENT and http://www.wam.umd.edu/~mckinney/Organizations/IMA/standards.html Standards
of Ethical Conduct for Management
||See http://www.coe.ttu.edu/Murdough/north.htm for
PRINCIPLES OF ETHICAL CONDUCT IN
ENGINEERING PRACTICE UNDER THE NORTH
AMERICAN FREE TRADE AGREEMENT
||See http://www.aiaa.org/information/ethics.html for
the American Institute of Aeronautics
and Astronautics, Inc.
||See http://www.apta.org/Ethics/PTA_ethics.html for
Standards of Ethical Conduct for
the Physical Therapist Assistant
||See Uniform Standards of Professional
Appraisal Practice, The Appraisal
Foundation. 1999 Edition.
||See http://www.taknosys.com/articles/art02.htm published
by Taknosys Software Corporation,
Texas A&M University.
||See http://www.law.cornell.edu/lawyers/rule_3.1.html through http://www.law.cornell.edu/lawyers/rule_3.1.html of
the American Bar Association's Internet
||See http://csep.iit.edu/codes/coe\Canada_bar_ass.html of
the Canadian Bar Association's Internet
||See http://www.newshare.com/west/guidelines.html of
the Judicial Conference of the United
||See https://www.appraisalfoundation.org/uspap1999/toc.htm and
subsequent documents with the Appraisal