No brain? No problem for tax official
Tax battle brewing at Kansas-Missouri border

$1.63 tax bill horror story

Back when our property tax and homeowners' insurance payments were part of our monthly mortgage payment, every year near the due dates I would call the county tax office and insurance company to make sure our mortgage holder had indeed sent the money.

The hubby always thought I was a bit obsessive, but I just needed to know. Plus, if the tax bill was paid soon after the statement was sent instead of at the end of the payment period, we got a bit of a discount.

Even now that we make these payments ourselves instead of escrowing the money each month, I still confirm that our personal checks have cleared and our accounts are marked paid.

And this homeowner horror story underscores why I am so fixated careful.

Unpaid taxes, unimaginable hassle: Back in 1996, Kermit and Dolores Atwood never received the tax bill for their Slidell, La., home. It was only $1.63, but the small amount didn't matter to the tax office.

Tax_sale_properties_2 When it went unpaid, the
home was sold the next year in
a tax sale.

The price:
The $1.63 in unpaid taxes, plus 10 cents interest and $125 in sale costs.

The Atwoods didn't find out about the sale until 2000, about a week after the expiration of the three-year period in which delinquent taxpayers can reclaim their property.

Thus began a seven-year legal battle, with the Atwoods seeking to keep their home and the company with legal title to the property wanting to recoup its investment. Details on Atwoods' tax ordeal can be found in this Times-Picayune story. 

Happy ending: Fortunately, after the Atwood's plight got widespread media attention, a Good Samaritan stepped in.

A local businessman, who wishes to remain anonymous, paid to settle the lawsuit with the land company that claimed their property. Per the agreement, the settlement amount was not disclosed, but "it wasn't a lot of money."

The moral of the story: Neither was the tax bill itself a lot of money. But it turned into big trouble.

The lesson for all homeowners is to know when your property taxes are due. Know what you owe. And then pay them!

When it comes to your home (and taxes), a little bit of obsessive-compulsiveness is definitely worth it.

Tracking tax sales: Most counties have Web sites that list property that will be auctioned because of nonpayment of taxes. Googling "property tax sales" gave me "about 81,800,000" potential pages to examine.

The IRS also periodically conducts auctions of property, real estate and other items, that has been seized because the owners didn't meet their federal tax liabilities. More information is available at this Treasury Department Web page.

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