Takings

A 93-Year-Old Woman Couldn't Pay Her $2,300 Tax Bill. The Government Sold Her Home and Kept the Money.

"This is very bad for property rights."

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Whether or not Geraldine Tyler will live to see the resolution of her case remains unclear.

The 93-year-old left her Minneapolis condominium in 2010 after a nearby shooting and a disturbing encounter left her uneasy. But she was unable to finance both her new apartment and the property tax on her erstwhile condo, accruing $2,300 in debt.

Over the course of the next five years, the government raised that debt by over 550 percent, tacking on almost $13,000 in additional penalties, fines, and interest. And when Tyler couldn't pay that, it seized her property, sold it for $40,000—and kept the profit.

Last month, a federal appeals court ruled that was OK.

"Tyler does not argue that the county lacked lawful authority to foreclose on her condominium to satisfy her delinquent tax debt," wrote Judge Steven Colloton of the U.S. Court of Appeals for the 8th Circuit. "Rather, Tyler argues that the county's retention of the surplus equity—the amount that exceeded her $15,000 tax debt—is an unconstitutional taking."

Put more plainly, Tyler is not contesting that she failed to pay her property taxes, nor is she trying to evade responsibility for doing so. Her suit doesn't seek the full $40,000 value of the condo but rather the excess proceeds that the government made from the sale of her property.

The court's conclusion: She has no right to that cash.

"It's pretty shocking," Christina Martin, an attorney representing Tyler with Pacific Legal Foundation, tells Reason. "This is very bad for property rights."

Tyler's situation may sound absurd. Yet she is not alone. Although most states' tax-foreclosure systems don't keep the profits from such seizures, there are about a dozen that do, sometimes turning homeowners into the homeless over a forgotten tax bill.

Consider the case of Bennie Coleman, who, at 76 years old, was tossed from his Washington, D.C., home by the U.S. Marshal Service over $134 in unpaid property taxes. The residence was valued at $197,000, all of which initially went into government coffers. Coleman reportedly spent months living on the front porch, sleeping on a lawn chair, suffering from dementia, and under the impression that he had locked himself out of his home.

"I see this all the time. Most people don't know, they don't understand what's going on," says Martin. "And no matter what, the government should not be able to take everything from you just because you owe them money….What I've seen in other cases like this is most people who lose their property this way are suffering from medical issues, or they're elderly. It also tends to affect the poor."

In other words, the tactic is often used against those who stand to lose the most from it. Though Tyler doesn't have any severe medical issues, she is not far off from her 100th birthday. "She said to me, 'How much longer is this going to take?'" Martin adds, noting that they are requesting a rehearing and will consider taking it up to the U.S. Supreme Court if that fails. "'I haven't got forever.'"

Tyler's experience is somewhat evocative of civil forfeiture, the process which allows the government to seize assets from people who police may suspect of committing a crime. Law enforcement can take wads of cash, people's life savings, vehicles, personal possessions, and more—often without criminal charges, much less a conviction. But her case takes it a step further, because this was not a punishment. It was a taking, one for which Tyler no longer has any recourse.

"[Let's say] you owe [the government] $15,000, so they seize all your mutual funds and then keep the change. How is this any different?" asks Martin. "For them to be able to do that is shocking, and it ought to worry people, because if they can do this to your house, what stops them from doing this to your mutual funds, your bank account, your car. You name it."

NEXT: Russian Sanctions: The Helpful, the Harmful, and the Pointless

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  1. "And no matter what, the government should not be able to take everything from you just because you owe them money…."

    That's not what the supreme court said about asset forfeiture. At least she actually owed the government money.

    1. Y’all think real estate taxes are unfair?

      “Body taxes” are coming!!!

      Today, if I sink my own labor into my house and yard, and thereby increase my assessed tax value of my property, I have to pay more taxes! If I cannot pay my taxes, they take my house! They tax me out of my house, so that a richer person can buy it!

      Very soon now, brain transplants will be a “thing”. If you cannot pay your body taxes, they will tax you out of your body! It’s only fair!!! I sink my labor into my house, house taxes go up. Hollywood star or athlete sinks labor or money into body (working out, cosmetic surgery, etc.), assessed tax value of their asses (AKA Hollywood assessed-asses-values gentrification) should go up! They should live under threat of being taxed out of their bodies, as I live under threat of being taxed out of my house!

      1. Rich old geezers (Warren Buffet, Bill Gates, etc.) will out-bid the young for their buff young bodies!!! Via body taxes, old geezers will body-hop and live forever, and the not-so-rich youngsters will be stuck with old-geezer bodies till they keel over prematurely! Write protest letters to YOUR Congress-Slime NOW!!!

        1. Didn't I already watch that movie?

          Anyway, rule around here is don't tell anyone you're improving your house. Easier if you in county land, but cities tend have squadrons of underpaid goons going around noting which houses seem to be having work done to them.

          1. One of my favorite screw-Government-Almighty fantasies is to (nominally) live in a dirt-cheap Ted-Kaczynski-style hut
            ( https://en.wikipedia.org/wiki/Ted_Kaczynski ) in the boondocks and pay ? $20 per year in real estate taxes... With an elevator-shaft hidden under the rug, and my $10-million mansion-digs buried deep underneath! How to construct it and where to hide the excavated dirt? And hide the construction processes from "electric spy eyes in the sky"? I don't know! It's just a fantasy!

            (If you have clever ideas on how to pull this off, please post them here, in case I ever get filthy rich.)

            1. Hah! My friend lives in one of those county islands in Portland Oregon. Looks like city, but is not city, so pays no taxes. Of course, gets no city services, but whatever. Portland is massive swiss cheese when it comes to county islands.

              Another friend is similar in San Jose. Still has property taxes because that's county not city, but avoids much of the city bullshit. On the other hand you can tell where the city ends and the county island begins, because the road turns into dirt...

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            2. Tent the area you are going to excavate like its being fumigated. Tunnel to a few miles away and up to the surface and tent that area also. Build a conveyer system in that shaft to haul all the dirt out. once excavation is complete, remove the tent and advertise (anonymously) free dirt and minerals and let the scavengers come get all that precious gardening soil. My diabolical plotting services may be available for hire in the future, in case you ever get filthy rich.

          2. In St. Louis the inspectors just check for construction debris in the alley dumpsters. (You aren't supposed to use alley dumpsters for construction anyway.)

            If they find construction debris in one near your house, they will look around and see if it looks like you're having any work done. If it looks like you're having work done, they will check to see if you have a permit.

            If you do have a permit, they will just bust you with a ticket for improper disposal. If you don't have a permit, they will bust you with a stop work order on top of the ticket. Whether the work being done actually requires a permit or not doesn't usually figure in.

            The bad news is, some cheap contractors like to use alley dumpsters far outside the area their project is in, and not the ones by their project (or renting a construction dumpster, or paying a landfill). So the debris in the dumpster behind your house may not even be from your construction site. Have fun convincing anyone at City Hall.

            1. I don't remember if it was in Philadelphia or not, but I do remember stories from the 1990s where local building inspectors just hung out in the Home Depot parking lot, and any Home Depot customers who bought large amounts of material got followed. The inspectors then checked to see if permits for the construction were issued and if not, cracked down.

              1. I actually had that happen to me when repairing my sister's fence after a storm.

                You need a permit to build a new fence, not to repair an existing one.

      2. And think of all these taxpayers walking around with an extra kidney...

        1. Good point! Kidney taxes; we NEED them in order to be FAIR around here!!!

          1. Kidneys taken by eminent domain? Hey, keeping some other joker alive could be of public benefit. Kelo is a slippery slope.

            1. Especially if they pay more in taxes per year than you do.

      3. The Long Arm of Gil Hamilton! I knew there had to be Larry Niven fans around here somewhere.

        1. I've read Larry Niven but haven't read https://www.amazon.com/exec/obidos/ASIN/0345342380/reasonmagazinea-20/ ... Refers to "organ-leggers" like "boot-leggers" in the comments on this book, to 1 of the 3 novellas contained herein...
          You must be a fart smeller! I mean, a smart feller!

          Here is some much newer but kinda obscure sci-fi that you might enjoy... https://www.amazon.com/Kindle-Store-Etza-B-Happenin/s?rh=n%3A133140011%2Cp_27%3AEtza+B&tag=reasonmagazinea-20.+Happenin ... Only vaguely libertarianish... I think the author keeps the politics down to less than a dull roar, for fear of scaring off readers. But the libertarian streak comes through anyway, on book #1, and, a bit less so, on #3 as well...

    2. > "[W]hat stops them from doing this to your mutual funds, your bank account, your car[?]

      Nothing, and that's the point, and that's what Canadian Truckers and Russia are a run-up for.

  2. From a libritarian perspective it should be argued that property tax is immoral in a free market society. if a person can Come and say you owe them money for being a a peice of land, then do you really own it? the answer is no. property ownership does not exist anywhere that has property tax

    1. Property ownership does not exist while the Wetlands Act or the Endangered Species Act exist.

      1. Also true

        1. An endangered species can live on my land and get along just fine until it's presence there becomes an inconvenience to me, such as by blocking a project I want to do on my own land. What the regulators who would prevent you from doing on your own land don't realize is that out in the country .22's don't make much noise, antifreeze doesn't make any noise at all, several pieces 2 inches long of 1/2" copper pipe drive in below the bark, or some judicious girdling will take out whatever you need taken out, plant or animal. Salamanders may be hard to get, but most species can be "handled" with one flavor or another of the SSS solution.

  3. The fact that Americans tolerate this blatant feudalism, means that none of us --not one-- deserved any kind of liberty or property whatsoever.

    1. *deserves
      What idiot put the S right next to the D on an English keyboard anyway?

      1. The current keyboard was designed to minimize the number of time adjacent hammers would strike when using a typewriter. The design has had some staying power even thought it's not technically necessary anymore

        1. I know that but, seriously, they could have switched F and D just as easily. "Deservef" would be an obvious typo

          1. Not to someone from the 1700’s.

        2. That claim gets made all the damn time, but there's actually no evidence whatsoever for it. The first recorded appearance of jamming theory dates to more than a half-century after the design was in mass production, and when it appears, it appears from people who had no connection at all with the people who actually were involved in the design and development of the first QWERTY-layout typewriter.

          What we know about the development of the QWERTY layout is:

          1) That Sholes's first patent in 1868 was a piano-like two rows, with an alphabetic order layout, while the eventual 1878 Remington-manufactured modification of a later Sholes design used QWERTY.

          2) In that intervening ten years, Sholes intensively user-tested a whole series of designs with court stenographer James O. Clephane. Accordingly, there was some sort of result from testing that produced the almost-QWERTY layout that Remington then very slightly modified into the final QWERTY layout.

          3) The QWERTY design could not have been developed to solve problems caused by fast touch-typing, because touch-typing techniques weren't invented until many years after Remington started manufacture.

          1. What absurd nonsense. There is documented evidence of the earliest typewriters jamming due to typing speeds. Touch-typing isn't important, typing fast is. There is also express evidence - explicit contemporary statements - that QWERTY was designed to slow things down.

            1. There is also express evidence - explicit contemporary statements - that QWERTY was designed to slow things down.

              No, there isn't. Neither you nor anyone else can cite a source, any source, that is either remotely contemporary with the introduction of the Sholes and Glidden/Remington No.1 typewriter, or sourced to anyone who had any role in developing that typewriter, that QWERTY was designed to slow things down.

              Seriously, go ahead, try it. Cite any source from any point in the whole 19th Century, or attributed to anyone who even claimed an acquaintance with any of the many people who helped develop it.

              You'll fail, because no such source exists. The whole QWERTY-was-to-slow-things-down thing is a myth, like George Washington and the cherry tree, Abner Doubleday inventing baseball, Columbus being the only guy who thought the world was round, or "FUCK was an acronym for 'Fornication Under Consent of King'". They're all total bullshit, no matter how many times people have repeated the lies.

        3. “It’s not technically necessary anymore.” You mean like what we’re going to have to do with our clocks later tonight?

        4. Anyone ever seen a Chinese typewriter?

  4. You want to talk about tyranny?!? Read this:

    Twitter

    Zachary Petrizzo

    There is a lot of chatter over the CB radio today about Beltway drivers flipping truckers off. "He put his fingers up and pulled that type of crap," a trucker complained during their Beltway loops, while another trucker insisted that he considers such a "terroristic threat."

    Jesus Christ! Talk about fascist tyranny. This sort of thing is the thing that Democrats and their fascist bootlickers at The View and at CNN probably laugh their asses off at. That’s absolutely Not funny at all, Whoopie Goldberg. What a warped sense of humor one develops when you become a crypto.fascist.woke.Nazi.elitist.

    1. Ugh. Just atrocious writing.

      "This sort of thing is the thing that Democrats and their fascist bootlickers at The View and at CNN probably laugh their asses off at."

      How does a sentence this awkward even make it into a first draft?

      Please, please bring back "American Socia1ist." I want to hear more about his skyrocketing net worth in the #BidenBoom.

    2. Boring. 0/10

    3. Are you not even remotely embarrassed by how bad you are at this?

      1. Historical evidence would point to "no".

  5. "[Let's say] you owe [the government] $15,000, so they seize all your mutual funds and then keep the change. How is this any different?" asks Martin.

    It's completely different, but he knew that when he begged the question. She had 6 years to sell the property, redeem the foreclosure and pocket the difference and she never took any action at all.

    Personally I despise property taxes. You don't really own something to which the government has lien rights in perpetuity. As this case proves, it is just on loan until you don't make the tax payments.

    That being said, allowing the foreclosure and sale of a property which has positive equity is just plain stupid. She had six years to get it taken care of and there are hundreds of thousands of agents who deal exclusively with real estate.

    1. She's not stupid. She's 93 and we need to ensure it is very easy for her to vote.

    2. But she did not owe the gov that labor. Nothing compelled her to go through the effort to do that. She owed them cash money. Any avenue that would have given her that money would be appropriate, so why ththe expectation that she choose the path of selling a home?

      She did not owe them any more than the original bill, save arguably the cost to recoup it from her. Anything beyond that is stealing.

      If I pay a cashier with a $100 for a $45 bill, even though I also have $45 exact, the cashier owes me $55. That they had to labor more than the $45 exact would have needed does not entitle them to the whole $100. If they kept it from you I am pretty sure you would demand it your change even though they did the work to break the $100 down into smaller bills.

      That is pretty much what happened here on a much smaller and more personal scale.

      1. She should have paid attention to those Tom Selleck commercials.

    3. That's some real crystal concentrate victim-blaming bullshit right there. She recognizes and is willing to pay the cost of negligence in the matter of her property taxes. But what the state has done here is like a rape victim being blamed for being inebriated in the wrong part of town and not only getting that blame but the police all get to rape her too.

      Or you just wanted to advocate for the douchebag position.

  6. You have no property rights if you have to pay rent to someone, even the local government. Georgist libertarians don't seem to understand that.

    The only libertarian tax is no tax at all. A per capita tax (like membership dues) would be the next best option, followed by a low sales tax (but not a "Fair Tax" on top of the existing income tax.)

    1. The Fair Tax proposal is explicitly NOT in addition to the existing income tax.
      https://fairtax.org/

      1. I know that, and you know that, but what are the odds it passes and they repeal the income tax at the same time, never to return?

        More likely we will get a VAT in addition to the income tax.

  7. And I get that it's a sad story when an innocent 93-year-old woman is kicked out of her house over unpaid taxes. But it would be just as bad if she were 39.

    1. A 39 year old still has a working moneymaker.

      1. Today, that isn’t necessarily true.

    2. She didn't get kicked out of her condo...

      The 93-year-old left her Minneapolis condominium in 2010 after a nearby shooting and a disturbing encounter left her uneasy. But she was unable to finance both her new apartment and the property tax on her erstwhile condo, accruing $2,300 in debt.

      ...she abandoned it. She didn't sell it. Then she didn't pay her taxes for a year. Then she ignored the foreclosure while the state waited, as required, for the next 5 years.

      Now lefties are whining because the state is keeping the profit on the sale of property that an old lady abandoned. There are plenty of government injustices in the U.S. This is not one of them.

      1. She may have abandoned it... but that is not necessarily true given the article.

        She left... nothing says she never came back, even to just check on it.

        And it is her right to abandon it. It is her house after all.

        If it came to such disrepair they could have condemned it. But they didn't do that. They sold it, paid off her bill, then refused to give her the leftover portion of her home that she did now owe them that had now been transformed into cash.

  8. @Billy: Your article may please Portland's Millenials who never bought any real estate, but as for the rest of the real world, it's clear you and your fan base are clueless about property taxes. Itxs clear you've never actually bought a home or land and had to pay property taxes, or else lose your property.

    Getting your home seized for back taxes and sold at auction goes back so far I can't even count the decades, and it's the law in every state in the Union, and also in most EU countries.

    It's not some communist plot. It's how the world works.

    Ask any good realtor. They make sure their customers know that they have to pay annual county or state property taxes. Your bank automatically adds it into your new mortgage payment each year, year after year, so maybe you didnt know this? County tax assessors across this country, from Florida to Tennessee to California, work with people who owe back taxes to ensure that tax foreclosure is avoided.

    There is an area where property seizure is a travesty, and that's what you should've written about. I'm talking about government seizures where a drug crime is committed, and the local government seizes someone's home or car or bank account, and they have to fight in court to win it back, EVEN IF they had no knowledge of the criminal activity.

    Let's not forget the IRS. They will seize your home, bank accounts or cars if you dont pay your taxes within 4 months. They were sending out bogus CP504s Notice to Seize Property back last fall, without the required 3 step process. This has come to an end thankfully, but it underscores that you can't escape death or taxes, not county, not state,nor federal.

    Nor can we escape click bait journalism.

    Next time, do more research. This was a sophmoric and moronic piece. You write well, so please use your talent more wisely.

    1. The lady doesn't dispute the foreclosure. She fully admits that she was in arrears and that the foreclosure and selling was legit. Her argument is only about the money above and beyond her debt.

      Anything beyond what she owes them is not their money by definition. It is hers and to take it is theft. It is only that portion she is arguing against. And in any moral world... she is right. Legal tradition be damned (please tell me you aren't going to use "but it's legal" as a justification for perpetuating a law without possibility of review).

      1. Are you suggesting the Kristallnacht laws were wrong?

    2. "Getting your home seized for back taxes and sold at auction goes back so far I can't even count the decades, and it's the law in every state in the Union, and also in most EU countries."

      The government gets to take the house. It gets to sell the house. It gets to take what it's owed out of the proceeds of the sale, plus all the fines, etc., which have accumulated.

      Then what happens to the rest of the money, if any? I believe that's what the article is discussing.

      1. As I'm not the first to note, this seems very much like an excessive fine.

        "Excessive fine" presumes that the person is legitimately subject to a fine, the question is whether the *amount* is constitutional.

    3. Wasn't transportee indentureship and chattel slavery "the way the world works"?

      1. Burning the witches was also the way the world worked! Down with baby-killing witches, and UP with the NEW Christian 3-Gods-in-One!

        Today, the extremist Trumpanzees gone apeshit want to work us all up into a lather, outraged enough to get us to burn the vote-stealing Demon-Craps! And bring ON the Trumptatorshit of the masses! New day; same old shit!

    4. across this country, from Florida to Tennessee

      The Confederacy?

    5. Property taxes are not “automatically added” to a mortgage. That only happens if the loan type (FHA, VA, certain conventional loans) requires it, or the loan applicant voluntarily agrees.

  9. Minneapolis. Democratic government. Are we surprised?

  10. I had a Planet Fitness membership for a while, and then I found out I could do most of those exercises for free at my neighborhood park for a way way way cheaper membership price. I stopped paying my PF membership fees and only went there for the occasional times when the weather would not allow for an outside workout. They didn't like that very much and so they threw me out.

  11. Isn't that a bit like stealing?

  12. Pft..... "because if they can do this to your house, what stops them from doing this to your mutual funds, your bank account, your car. You name it."

    But they do TAKE all that from everyone..... Part of the Nazi-State membership subscription. "It's for those 'poor' people in D.C." don't ya know. The richest and least productive area in the USA.

    1. ....because; That's not YOUR stuff; That's [WE] stuff....

      Sell your Individual souls to the [WE] foundation; because you don't own you, [WE] own you....

      The DNC flagship......

  13. They'd just sell it for $2,300 then.

  14. Tacking on almost $13,000 in additional penalties, fines, and interest on a $2,300 tax bill should be a crime. This is one method the government uses to keep poor people in their place being poor.

    The then the government seizes more than the inflated amount and keep any equity which should also be a crime. But this is Okay because the government courts says it's Okay.

    Change the name from "Government" to "Mafia" and it would be a crime. The only difference is that the Mafia seems to have more honor than the Government does.

    1. After you pay the Mafia their protection money, they actually leave you alone.

      If someone else comes and fucks with you after you've paid protection money, they might actually come protect you.

      1. They might and they did, especially if the person fucking with you was someone they weren't fond of to begin with.

        But so might DC Beltway Swamp inhabitants!
        I mean, if they think the Republicans are messing with you, they will not hesitate to exaggerate, misrepresent and bloviate hysterically about the transgression,

  15. The constitution forbids excessive fines. The appeals court fucked up, and deserves a bitch-slap and disbarment.

    -jcr

  16. very bad step taken by Government . They should see her age Atleast. Very bruttle case till now i ever heared.
    The then the government seizes more than the inflated amount and keep any equity which should also be a crime. But is it Okay because the state government courts declares it's Okay.
    https://shrihanumanchalisa.in

  17. I stopped paying taxes on 35 acres of landlocked second growth woods. Tried to give the town the land as open space - Nyerere. They did not want it. I had temporary access to it for agricultural purposes. None of the contiguous owners wanted it.
    Haven’t heard much for the past 6-7 years. Hoping it would just go away. Seize the land.
    For tax purposes I may be able to use it as a capital loss.

  18. I'd like to hear the whole story. And I'd like to understand the Judge's reasoning.

  19. Five gets you ten she dutifully voted "D" for the last 75 years.

  20. It has been this way for 100 years. No one owns anything, the government owns it.

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