Monday, August 08, 2016

tax sales - RETSL - right to installment plan - stay - "default"

Barker v. Chester Co. Tax Claim Bureau – Cmwlth. Court – July 27, 2016

The court set aside the sale and reversed the lower court, holding that

            - Taxpayers did not default under a 2010 installment agreement under sec. 603 where, although they were late with some intermediate installment payments, they made the final payment within the applicable period – “when due.”  Therefore, there was no “default” of the agreement, and the taxpayers were not disqualified from eligibility for a 2013 installment agreement under sec. 603, which bars eligibility if there was default on agreement within prior three years.

            - Sale also set aside because, even assuming there was a default,  the TCB’s admitted failure to give the taxpayers notice of such violated the notice requirement under sec. 603.

There was a lot of good language in the opinion, including the following:

            - notice of right to installment agreement must be given by TCB upon payment of 25% of the taxes due -  An upset sale must be stayed where a taxpayer pays 25% of the taxes due and agrees to an installment plan for the remainder. Further, where a taxpayer makes a payment of 25% or more, “the tax claim bureau must advise the taxpayer of the Section 603 option because its failure to do so ‘would deprive the owner of his or her property without due process of law.’” In In Re Consolidated Return of the Tax Claim Bureau of the County of Beaver from the August 16, 2011 Upset Sale for Delinquent Taxes, 105 A.3d 76 (Pa. Cmwlth. 2014), petition for allowance of appeal denied, 121 A.3d 497 (Pa. 2015),   Id. at 82 (emphasis added) (quoting Darden, 629 A.2d at 323).

            - purpose of RETSL is collection of taxes, not taking of taxpayer’s property -  The statute was not enacted to deprive citizens of their property or to create investment opportunities for those who attend tax sales but, rather, to assist the collection of taxes. Stanford–Gale v. Tax Claim Bureau of Susquehanna County, 816 A.2d 1214, 1216 (Pa. Cmwlth. 2003). The United States Supreme Court has held that due process is implicated in any taking of property for the collection of taxes, stating that “[p]eople must pay their taxes, and the government may hold citizens accountable for tax delinquency by taking their property. But before forcing a citizen to satisfy his debt by forfeiting his property, due process requires the government to provide adequate notice of the impending taking.  Jones v. Flowers, 547 U.S. 220, 234 (2006). Because of these due process concerns, this Court has explained that
the focus is not on the alleged neglect of the owner, which is often present in some degree, but on whether the activities of the Bureau comply with the requirements of the statute.  Smith v. Tax Claim Bureau of Pike County, 834 A.2d 1247, 1251 (Pa. Cmwlth. 2003). A failure by a tax claim bureau to comply with each and every statutory requirement will nullify a sale. Id. at 1252.

If the case is old, the link may have become stale and may not work, but you can use the case name, court, and date to find the opinion in another source (e.g., Westlaw, Lexis, Google Scholar)