Want to save a little cash on your tax bill? A new Seattle Internet startup by the name of ValueAppeal believes it has devised a mathematical formula to determine whether homeowners are paying too much in property taxes.

Better yet -- especially for you penny pinchers in the audience -- ValueAppeal creates a customized report that homeowners can print off and then send to the assessor's office in an effort to reduce their property taxes. If successful, that can save hundreds or thousands of dollars each year.

"The property tax appeal process is just a mess," said Charlie Walsh, the 31-year-old founder of ValueAppeal.  "It is totally opaque and homeowners are at a total disadvantage when it comes to finding the information they need."

An Eastlake condo owner who has never before filed a property tax appeal, Walsh said he became interested in the problem after talking to several people about their frustrations trying to figure out why their home was assessed at a certain value.

After some of those conversations, the idea just kept building in Walsh's head to the point where he couldn't sleep at night.

"I knew that if I didn't do it, I was going to regret it," said Walsh, who created the company in February and has bootstrapped it with about $100,000 from friends and family members.

ValueAppeal is relatively simple to use. Plug in your address, and within a few seconds the algorithm spits out a report telling you whether you are eligible to appeal.

In my case, ValueAppeal estimates $949 in tax savings if I appealed.

The company charges $99 to create an appeal document, which includes a list of comparable properties that are supposed to reflect the true value of the home. (Eventually, it will allow homeowners to include photos of damaged roofs, foundations or floors, which also could lower the assessed value.)

Of course, there's no guarantee that the appeal board will lower the assessment. But Walsh is so confident in the accuracy of the algorithm that he's promised to return the $99 fee if the appeal is unsuccessful.

The site has no advertising, and Walsh said it is unlikely they will head down that path. Other revenue sources are emerging. For example, he's considering adding a service where homeowners could pay a fee to have a representative go to the appeal board meetings on their behalf.

There's also been some interest from real estate professionals who handle tax assessment appeals who have wanted to subscribe to the service.

ValueAppeal's timing -- which is officially launching next week --  is impeccable.

If you're a condo or homeowner in King County, you've either already received or soon will receive a letter in the mail from the county assessor's office with a new home appraisal. That appraisal will be used to calculate the tax bill due next year.

Given the wild fluctuations in the housing market over the past 18 months, appraisals have come down in some neighborhoods. But Walsh said in many cases they haven't fallen enough, creating an opportunity for homeowners to appeal.

"What we've seen so far is the assessed values have tended to remain high, while the market value has gone down, which means there are a lot of angry homeowners out there," he said.

Walsh

Regional studies and ValueAppeal's own internal research indicate that about 40 to 60 percent of homes in the country are over assessed, Walsh said.

In Seattle's Magnolia neighborhood -- one of the first where homeowners received assessments this year -- Walsh said that the assessor dropped values on average by 18 percent. But despite that significant drop, ValueAppeal's analysis finds that about 38 percent of homes in Magnolia are still over assessed.

Another factor working to ValueAppeal's advantage is the tight economy. With unemployment rates rising and family budgets extra tight, people are looking at new ways to cut costs.

Reducing the tax bill is an attractive option.

Meanwhile, property tax appeals are on the rise. In 2007, there were an estimated 3,000 appeals in King County. That number jumped to 13,000 last year, with Walsh expecting another increase this year.

ValueAppeal is not alone in the sector, which really only started to emerge in the past couple of years.

Other players include Laguna Hills, Calif.-based CA PropertyTaxSavers and Lynnwood's LowerMyAssessment.com. San Diego-based EasyTaxFix -- which operates in parts of California and New Jersey and is in the process of adding counties in Florida and Illinois -- charges $49.95 for its reports.

At this point, ValueAppeal is only available to residents in King County. But Walsh is planning to expand to four to five other large counties this year, including an undisclosed Florida county in the next few weeks.

Eventually, he hopes to have ValueAppeal operating in the 700 largest counties in the U.S.

Scaling the business can be tough, since each county has its own tax forms and policies.

"The data we get from 700 counties will have 'view' described 700 different ways, so our challenge is to create a custom algorithm for each of these counties that can understand that data," he said.

At this point, Walsh said it takes about two weeks to get a new market established. But he's hoping to reduce that time as they gain more experience in rolling out new markets.

While ValueAppeal has attracted an undisclosed number of customers in King County, it is too early to tell whether its working. Furthermore, Walsh admits that some consumers will have a tough time wrapping their head around the idea of trying to make the case that their home is worth less.

"Yeah, it's a bit of a mental shift to try to prove the lowest possible assessed value for your home," he said.

John Cook is co-founder of TechFlash. Follow on Twitter @johnhcook.