TAX FERRETS

TAX FERRETS. "Tax ferrets" is a name given to a public employee who looks for properties that have not been assessed for taxes and puts them on a list to be assessed. (1) In 1900 supervisors in Polk County hired tax ferrets to find property owners who had been evading taxes. In five months the total discovered was $100,000 (equal to $3,000,000 in 2018). (2) Attorneys in Cedar Rapids used a supreme court decision from Minnesota to claim that supervisors had no constitutional authority to make contracts. (3)

Despite this, a large number of Iowa counties had employed tax ferrets despite complaints about their methods. The Dubuque Herald, in May, 1900, stated without explanation that the Waterloo Reporter was convinced tax ferrets could do as much harm as tax dodgers, (4) Ferrets were driven by the commissions they received. Prior to June 1, 1900 ferrets were paid commissions ranging from 25 to 60 percent. After June 1st, the commission was limited to 15% by state law which to some still seemed excessive. (5) In May 1901 the Bremer County treasurer and county auditor both denied the authority of tax ferrets to sign and send out tax notices. (6)

Despite the controversy, the Dubuque County Board of Supervisors signed a contract on the sixth ballot with W. H. Charters, of Sidney, Ohio on August 22, 1900. Competing firms had come from Des Moines and LeMars. Charters agreed to pay all expenses including the cost of litigation for 15% of the taxes paid into the treasury. (7)

On July 1, 1901, a six year contract was signed between the city council and Messrs. Charters and Worson. (2) By August, a problem had developed. Mayor Berg announced that he had found a flaw in the contract, a claim dismissed by City Attorney. Berg claimed that a clause, inserted at the request of the council, describing the time of the contract made it perpetual. A meeting held in the city attorney's office had seemed to settle the matter until the mayor discovered the city attorney had told the City Recorder that the mayor could be forced to sign. This infuriated the mayor who said he would not sign until satisfied of the language. (4)

The Davenport Democrat on August 21, 1901 published part of a letter from Mayor Berg to Mayor Heinz of Davenport. Berg was quoted as saying he thought the position of Mayor Heinz and City Attorney Thuenen was sound in that special charter cities had no been given the authority to contract with ferrets. (5) The council met on August 22, 1901 with the issued unresolved. Mayor Berg stated he would ask City Attorney Duffy for an opinion as to the legal right of cities under special charter to hire tax ferrets. City Attorney Duffy, however, said he had not been previously asked for the legality of the city hiring tax ferrets. (6)

In November, 1901 the largest amount yet filed against an individual was announced. Edwin W. ALBEE was asked to pay $5,000 in back taxes. (Equal to $150,000 in 2018.) The newspaper reported that "other wealthy city residents have been seen before the agents." (7)

The city council's Committee of the Whole Report in favor of hiring tax agents was voted down in December, 1901. The question was to be put to the electorate in the municipal election in the spring of 1902. (8)

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Source:

1. "Tax Ferrets," The Law Dictionary. Online: http://thelawdictionary.org/tax-ferrets/

2. "How Tax Ferrets Work," The Dubuque Daily Herald, September 1, 1900, p. 6

3. "Contract is No Good," The Dubuque Sunday Herald, September 9, 1900, p. 5

4. "City Briefs," The Dubuque Herald," May 20, 1900, p. 5

5. "Hard on Tax Ferrets," The Dubuque Herald, June 29, 1900, p. 2

6. "Tax Ferrets Have Trouble," The Dubuque Daily Telegraph, May 20, 1901, p. 1

7. "Tax Ferrets Engaged," The Dubuque Herald, August 23, 1900, p. 4

4. "Employ Ferrets," Dubuque Daily Telegraph, July 1, 1901, p. 8

5. "Seen and Heard," Dubuque Daily Telegraph, August 21, 1901, p. 5

6. "Tax Ferret Coming Up," Dubuque Daily Telegraph, August 22, 1901, p. 3

7. "Asked to Pay Large Sum," Dubuque Telegraph-Herald, November 30, 1901, p. 6

8. "Voters Must Decide," Dubuque Telegraph-Herald, December 6, 1901, p. 7