DENVER -- Denver Auditor's office said it will fast track an audit after CALL7 Investigators uncovered thousands of dollars the city failed to collect because of property improperly being put on tax exempt status.

"We met this morning after seeing your story last night and we've decided to move that audit up a little bit based on risk factors obviously identified," said Denis Berckefeldt, spokesman for the Denver Auditor's office. "If it's the city's fault for not determining that it's owed, then that's a problem that has to be solved."

Denver Auditors had scheduled an audit of the Denver Assessor's Office for later in the year, but after the 7News story they decided to move it up and look into whether properties are improperly in tax exempt status.

A computer-assisted review of exempt property by CALL7 Investigators showed that some homes are labeled as exempt when they are owned by private individuals who should owe taxes.

And when Lowry resident Lynn Cossey called and then went to the Denver Assessor’s office to try to change his property’s status, he was ignored and then blamed for the assessor’s mistake.

“He said ‘I valued it correctly, I don’t know why there's an exemption there,’” Cossey said of his phone call to the assessor’s office. “I asked him if he could help me and he said, ‘not my job, somebody else's job.’"

Most of Cossey’s neighbors were also improperly exempt because the assessor did not notice when the property was transferred from the Lowry Redevelopment Authority, a political subdivision that is tax exempt, to a developer in 2009 and then a homeowner.

Just in Cossey's block, the city did not collect more than $35,000 in those two years.

“All the people on this side of the street are being taxed and all of the people on this side are not,” he said.

After his phone call didn't solve the problem, CALL7 Investigators accompanied Cossey to the assessor’s office with a hidden camera to see the city employees reaction when Cossey tried to get his property taken off exempt status.

“So basically the city has been missing taxes on all these properties for years?” a CALL7 producer asked.

“Yeah,” said the clerk, giggling.

“And whose job is it to catch that?” the producer asked.

“The owner,” the clerk said.

“Why is it my fault?” Cossey asked.

“Well only because of the tax, you know you get the tax bill, pretty much every year,” she said.

But Cossey did not get a tax bill because, like most people with a mortgage, the mortgage company collects money that is put into escrow and then the company pays the taxes. Cossey only discovered his property was exempt when the mortgage company returned his escrow because the assessor didn’t send a bill for Cossey's house.

“Eventually, they're going to figure it out, and they're going to come back and bill you and you're going to have to dig up literally thousands of dollars,” Cossey said.

A supervisor later told Cossey he would change the property status and Cossey and his neighbors would receive tax bills. Those properties have now been removed from exempt status.

Denver Assessor Paul Jacobs said it was his office’s fault that the property was not moved to taxable status, blaming a computer glitch that didn’t flag the properties.

“These are ones that should have been caught,” Jacobs said. “There are no two ways about that. A clerk (who) was processing a transaction should have known enough to either do it directly or ask a supervisor, 'what do I do with this particular one.' We missed it so that's on us.”

Jacobs said his office was doing a sweep of properties after Cossey and 7News flagged the problem, but Jacobs' office did not find other improperly exempt properties.

Using a database of exempt property, CALL7 Investigators found other houses in Lowry that were exempt when they were owned by private homeowners. CALL7 Investigators also found houses in other areas of the city that were exempt.

After Jacobs looked at the exempt property CALL7 Investigators uncovered, he confirmed those properties should have been on the tax rolls. “You've brought it to our attention, we certainly appreciate that part,” Jacobs said. “And we agree that that's something that should not have happened.”

Jacobs said the city did not lose revenue because the back taxes will now be collected and he points out that the uncollected revenue is a small fraction of the amount the city collects each year.

Jacobs said his department did an initial sweep and didn’t find any properties – other than the ones Cossey and 7News flagged – that should have been on tax rolls and not exempt.

Jacobs also wrote an email Friday afternoon to 7News saying while the affected taxpayers are a concern for his office, he considers the problem fixed.

"With that on-going assurance in place, this entire matter, now closed, has consumed an inordinate amount of time – hours that, with ever shrinking city budgets, needed to be applied to other work to prevent issues like this from arising in the first place," Jacobs wrote.

The audit is expected to start in early spring and the auditor expects to complete it before the end of the year.