Taxes

Supreme Court takes up property ‘theft’ dispute over unpaid taxes

POLITICS

WASHINGTON — The Supreme Court on Friday agreed to decide a property rights dispute. over whether government entities violate the Constitution. When they seize homes for failure to pay taxes. And then keep all the proceeds or allow private investors to profit.

Judges will decide whether such a seizure violates. The Takings Clause of the Constitution’s Fifth Amendment. which requires the government to compensate the taking of property. They will also consider whether government action can be viewed as an more penalty under.

The Eighth Amendment of the Constitution.

Jurors will weigh a claim brought by 93-year-old Geraldine Tyler. Whose Minnesota property was seized by Hennepin County. Because she owed $15,000 in property taxes and related costs. The county sold the home for $40,000 and kept all the proceeds, Tyler’s lawyers said.

The St. Louis-based 8th U.S. Circuit Court of Appeals ruled for the county in February 2022. rejecting Tyler’s constitutional claim. The state says that under Minnesota law it. “Gives property owners ample opportunity to protect their interests” before seizing a property. State lawyers noted that owners have three years to pay. The taxes and have the opportunity to repurchase the seized property.

The case was brought by the Pacific Legal Foundation, a conservative legal group. That often brings property rights cases. The Supreme Court, with a 6-3 conservative majority.

Is often sympathetic to property rights claims.

The group said in a report issued last year that a dozen states allow. What it calls “home equity theft” and that other states have laws. On the books that would allow it in some circumstances. Surplus proceeds are returned to the remaining states when confiscated property is sold.

Six states — Nebraska, Arizona, Colorado, New Jersey. Montana and Illinois — allow private investors to keep equity in properties. Once the back taxes are paid, the Pacific Legal Foundation says. Others allow the government to pocket the remaining equity when the property is sold.

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