For $8.41 in Unpaid Taxes, the Government Took Uri Rafaeli's House

[question everything]

Uri Rafaeli is an 83-year-old engineer and great-grandfather. He never expected the government to treat him like a drug dealer or gang banger. But last year the Michigan Court of Appeals held that a county government could use civil asset forfeiture—the same legal process used by police to confiscate drug lords’ mansions—to seize a modest rental property Mr. Rafaeli owned because he accidentally underpaid his property taxes by $8.41.

Mr. Rafaeli bought the house through his business for $60,000 in 2011. Later that year he inadvertently underpaid his property’s taxes by $496. When he learned of his mistake in 2013, Mr. Rafaeli attempted to pay the debt in full but failed to account for the interest that had accumulated since he received the bill. He came up $8.41 short.

Unaware of his error, Mr. Rafaeli went on to pay his taxes in a timely manner in subsequent years. Nevertheless, in February 2014 Oakland County foreclosed on the property to collect the tiny debt, along with $277 in penalties, additional interest and fees. Six months later the county sold the property at auction for $24,500 and refused to refund Mr. Rafaeli any of the profits.

(snip)

Cash-strapped local governments in Michigan rely on profits from the sale of tax-foreclosed properties. According to the Detroit News, Oakland County raked in $22.5 million by auctioning off tax foreclosures from 2006 to 2015. County officials use these funds to pay for tax-collection expenses and maintain properties worth less than their tax debts, but whatever’s left over gets swept into the general fund.

(snip)

In American law, civil asset forfeiture has historically been used to punish criminals by depriving them of property used in the commission of crimes or to hold property owners accountable for the crimes of others whom they have allowed to use their property. .. But modern forfeiture practice has been stretched beyond recognition. It makes little sense to seize property that is immobile—like Mr. Rafaeli’s house—and no sense as punishment for noncriminal activities. Underpayment of property taxes isn’t even a crime in Michigan, although that’s admittedly small comfort to those who have had their home, business or land seized and sold over a debt smaller than the price of a movie ticket.

More..

https://www.wsj.com/articles/for-8-41-in-unpaid-taxes-the-government-took-uri-rafaelis-house-1544227055 (paid subscription)

[Glamrock]

1. Does that mean the IRS can foreclose on Tacky-stan?

Otherwise known as Mar-a-Lago...

[question everything]

5. Depends. Has he not benn paying his property taxes?

[Glamrock]

6. Well, that's soon to come out....

But he basically bragged about not paying taxes during the election....

[TreasonousBastard]

2. This has been a scandal for years. Many states have attempted to correct this, but...

too many haven't.

[question everything]

3. And this is why I will not consider Harris until she explains her support

while AG in CA.

[mr_lebowski]

4. LAME! Wanna get really pissed off? Watch John Oliver's story on this ...

It has truly reached f***ing ridiculous proportions ...

[Hav]

7. So much wrong with that, it almost seems to be that way by design

Losing your hourse for such a low amount is ridiculous enough but then not receiving the difference between what was owed and the amount for the sold house would and should be criminal in most other cases.

[delisen]

8. A similar scam is using phony and false mechanics liens to foreclose

These scams often depend on there being unscrupulous lawyers working with the white collar scammers. They target older people who have low mortgages or have paid off their mortgages.

[Farmer-Rick]

9. Sounds like those judges may have gotten some of that money as kickback

Because that is one very stupid and uninformed ruling.