I find it quite probable. “They’ve stolen enough tax money from me for that property, they can eat eight freakin’ dollars!” under the assumption they wont actually take action over such a small sum.
1 Like
I don’t know specifically here, and not making any comment about this lawyer, but I’ve seen a lot of things that lawyers have been involved in, and, I would be hesitant to draw these kinds of conclusions just because a lawyer is the one providing the information.
1 Like
“they didn’t even tell me they were taking my home” is a glaring ommission from such a blantantly one-sided article.
3 Likes
I’m not sure if it is still commonplace, but several decades ago, the IRS sent me notices about previous returns. Both notices were sent 2 years and 11 months after the return was filed, one month short of the 3 year window for reviewing non-fraudulent returns. I can’t guarantee that they let it accrue interest, but my cynical side thought the the timing seemed odd. Fortunately, my later contacts with them were of a kinder, gentler nature.
The timing does certainly stink. I also can’t say if that’s commonplace but either they’re 2.9 years behind (which probably isn’t unrealistic in the current IRS gov’t cutbacks) and they really only go after the big fish, or they’re testing your ability to provide documentation in hopes accruing additional interest in unpaid taxes.
Not sure about 20 years ago, but nowadays the IRS doesn’t wait that long intentionally.
There are lots of reasons why it may have taken them that long. They could have gotten information from another exam that caused them to go back and look at many more returns. It could be that another office’s review took precedence. It could be that there was a new interpretation of the law that caused them to go back and look at all returns in statute. I’m definitely not an IRS sympathizer, but I doubt that they’re intentionally holding back notices solely to charge interest.
2 Likes
Update, more sketchiness documented in MI taking houses and home equity over tiny sums of missed property tax payments.
How do people keep underpaying taxes? Don’t you get a bill that shows exactly how much you owe? Plus according to the time line mentioned, a in-person visit with the homeowner should happen before the foreclosure is completed. How did that happen and homeowners do not appeal the foreclosure in January of the 3rd year?
That said, this situation is obviously not unique and the fruit of gross negligence on the part of the homeowner. So my guess is that the process is such a cash cow for counties that they conveniently fail to collect during the first two years and just hope the foreclosure proceeds to completion.
Morale of the story: don’t invest in real estate in that state up north. 
I thought the moral of the story is - pay your bills, deadbeat!
1 Like
Well, they do need to send one but they sometimes don’t send it to the right address, and they certainly don’t list your past due amount from previous semiannual property tax bills on your current bill to help you notice or pay it. That’s how several of the people profiled were late or missed one payment, and kept getting and paying all the rest of their bills on time for years before getting their house stolen (and some tried to pay the missed payment amount too, but didn’t pay the back interest so still lose their house). It’s clear the county foreclosure people are doing at most the legal minimum to warn people about the risk to their home equity.
These are not small amounts.
the excess funds can be channeled into the county budget. That’s how Wayne County has funneled more than $382 million in delinquent tax surpluses into its general fund budget since 2012
2 Likes
That phrase sounds so odd.
1 Like
Does that really mean they’ve seized $382 million worth of houses?
1 Like
More, that number is their net profit (although it is the total over a number of years) . Sounded like some of the houses were sold pretty cheap too (friends of the county officials?), so the FMV would be higher.
Here’s a paper cited for MA, rather than MI which is the main focus of the recent article, that suggests they’re taking a bit over $50M a year in home equity from MA residents.
1 Like
See, this is exactly what I meant about them deliberately trying to foreclose people. If they were truly interested in only collecting tax due and interest, they’d remind homeowners on their next tax bill by adding the past due + interest amounts to the next semi-annual tax bill. But that’d be much less profitable than if the homeowner messes up. So of course notices will get lost, sent to the wrong address, they won’t be able to reach homeowners, etc…
It’ll be interesting to see what the supreme court says about the practice though. If they found the law unconstitutional to allow county treasurers to appropriate that much assets to repay tiny tax dues, the tax situation in the state is gonna get a lot worse fast if they have to repay excessive tax proceeds collected. But considering the counties are fixing their budgets with this and 11 other states also allow foreclosures of properties for profit, I’m not sure common sense will prevail here.
On the other hand, the rules are what they are. You cant really fault them for playing along. If this is such a problem, I’d pin the blame on the state for creating the rules, not the counties for taking advantage.
Legislation certainly has its share of the blame there by not having the foresight to think of potential abuse and not doing anything to remedy it after abuse has been widely reported.
But putting the blame solely on the law, assumes that the intent of the law was to exploit to the fullest homeowner tax mistakes to start with. If that was not the intent of the law - and you’d have to hope it was not -, even if the process is legal (still TBD), the counties share a large portion of the blame for being unethical about it.
Imagine young kids setting up a lemonade stand to raise money where they’ll fill your cup with lemonade for $0.25, what the counties are doing is tossing their quarter and handing the kids this cup.
2 Likes
Is there ANY proof here in any of these instances that at any point that the mail was sent to the wrong address ?
I mean if you’re lawyer is arguing that your house was taken unfairly I think the failure to legally notify the homeowner would be a big point made by the lawyer.
So no… I don’t think that they simply aren’t sending mail to the homeowners at the right address.
I think that’s exactly what the intent was - to get vacant properties out of the hands of “investors” who are merely sitting on the properties rather than maintaining them, and get it done quick and dirty. It’s well know in a lot of places that you can help your cashflow by skipping a few tax payments, make the minimum installement necessary at the last minute to restart the whole process over, etc, to keep the property at minimal cost.
What wasnt intended was catching residential owners who inadvertently short-pay by a few dollars.
The article says it’s still being litigated. Hopefully they’ll get their equity.
3 Likes
This was from the article, suggesting perhaps the notice letters went to an old(?) address:
But Wayne County never informed them of the unpaid debt, they say, because the notices were sent to the wrong address. But the county should have known the correct address for the notices because more recent property tax payments indicated the proper address, says Martin.
In another case, they were sent to the correct address of a place under construction, but apparently in such a way that nothing was left since no one was there to sign for them. So the state tried but failed to notify the owner.
Cass County argues that it took the appropriate steps required under law, sending two certified letters to the address. Both were returned as undeliverable, likely because there was no one actually living at the address yet.
1 Like