Vol. 72, No. 11, April 7, 2001

OBA Real Property Section:
Serving the Oklahoma Tax Commission
By John B. Wimbish

Knowing if the Oklahoma Tax Commission ("Commission") is a proper party to actions such as partition suits, foreclosures, quiet title actions and actions to determine heirship; and if the Commission is a proper party, the correct way to join the Commission in the lawsuit can prevent these actions from taking longer than they should. If the proper procedures are followed, the Commission is typically efficient in its handling of these matters so that normally it will not be a cause for delay in completing them.

The basic statutes which govern the Commission’s responsibilities in these matters are 68 O.S. 1997 §§ 234(b) and 801. The importance of following this statutes is found in the fact that the statutes provide that the "court does not acquire jurisdiction to enter any judgment against the State of Oklahoma or the Oklahoma Tax Commission" unless the provisions of the statutes are complied with. I will try to point out the steps needed to comply with §§ 234(b) and 801.

When a person dies in Oklahoma owning real property, immediately and without notice the Oklahoma Tax Commission has a lien on all of the deceased’s property to secure the payment of any estate taxes. When prosecuting actions to clear title to real property, a finding must be made that the Commission is not claiming a lien for estate taxes for any person claiming ownership in the real property which is the subject of the lawsuit.

Initially it needs to be determined if the Commission is a necessary party to an action. If any kind of action is being prosecuted dealing with the title to real property, whether it is a foreclosure, quiet title, partition, etc., and the persons purporting to be in title or having some claim of title have been dead for more than ten years when the action is filed, then it is unnecessary for the Commission to be joined, unless a tax warrant has been filed by the Commission to secure the payment of the estate tax. Any inchoate lien for estate taxes that the Commission might claim lapses ten years after the death of the decedent. However, if a tax warrant lien has been filed against an owner of the property, whether or not such owner is deceased, the tax warrant should be identified and the Commission made a party to the action.

If any person or persons in title or claiming an interest in the title to the real estate which is the subject of the action has died within ten years prior to the filing of the action without an estate tax clearance having been filed, then the Commission must be joined to determine if there are liens for estate taxes being claimed by the Commission against the real property involved.

If a foreclosure or other action is being prosecuted where the record reveals that the Commission has filed a tax warrant, each such tax warrant should be specifically plead in the petition with its identifying number of and identity of the tax payer. See 68 O.S. 1997 § 234(b).

If the petition alleges one of the parties claiming an interest in the real property is deceased, the petition should also allege the following facts: the name of the deceased, the date and place of death, and the name, relationship to the deceased and address of each heir, executor, administrator, devisee, legatee, trustee and assign of the deceased. It is recognized that a great many quiet title and similar suits are brought because these very facts are unknown to the plaintiff and cannot be determined with reasonable due diligence. If that is the case, as many of these facts as are known or have been ascertained by the plaintiff should be plead, together with an allegation that the other facts cannot be determined.

In addition to the petition, a separate Notice of Pendency directed to the Commission should be prepared. This notice should contain the following: the title and number under which the lawsuit is filed; the Court in which the lawsuit is filed; the name, date and place of death of all deceased defendants; the name, address and relationship to the deceased of each heir, executor, administrator, devisee, trustee and assign of the deceased (or so many of these facts that the plaintiff has been able to determine); the identifying number of any tax warrants that have been filed of record, and a legal description of the real property which is the subject of the lawsuit. This notice should be signed by the plaintiff or his attorney.

The notice along with the petition is to be served on the Commission in the same manner as the service of summons. The Commission has 40 days after the date of service in which to file a responsive pleading in the suit.

If this procedure is followed, the Commission will almost without fail, timely answer or disclaim and allow completion of the action. Failure to follow this procedure will, at best, lengthen the time required to complete the action as the Commission insists that it properly be made a party to the action. At worst, failure to follow this procedure may prevent the court from obtaining jurisdiction over the Commission with the consequence of making any judgment entered to be void as to the Commission. This would result in the potential of title to the real property, which was the subject of the lawsuit, not being marketable which would defeat the purpose of bringing the action in the first place.