True story: Harold & Maude are a forty-something couple with two teenaged kids. Both are educated, both work in IT, both are fairly sophisticated, financially speaking.
The Road to Hell, by Paul Stevenson.
Back in 2003, they bought a vacation condo, in Mono County, California—you know, where Mammoth Lake and the Mammoth ski resort are located, right next to Yosemite National Park. They bought the condo in mid 2003, then flipped it later that same year—they closed escrow the first week of 2004, with every t crossed, with every i dotted.
They went on with their lives: Work, vacations, kids, school, job, carpool—same-old-same-old, just like millions of other ordinary citizens.
Then one day in March of this year, they get a letter—a pretty frightening letter, actually.
It was from the Department of Finance of Mono County, informing them—in bold and capitalized letters—that they owed a “DELINQUENT AND UNSECURED PROPERTY TAX”.
The letter went on to inform them that they owed—in bold, italicized, underlined and oversized lettering (I’m not kidding)—5.99.
Guess the letter had to put the figure in bold, italicized, underlined and oversized lettering so as to make it really clear how much was owed—and to whom!
Be advised, a lien has been filed, said the letter in conclusion—in oversized bold lettering. Since they no longer owned the property, Harold and Maude weren’t sure what the county had put a lien on—if not their former vacation condo, then their current home? Their children? Their souls? Who knows—just that something had a lien on it—so you better pay up, buster! Now!
Or rather, Now!
Lucky Harold and Maude are pack rats—they had all the documentation of the purchase and sale of the vacation condo. After all, they had sold the condo over seven years before.
But when they dug up all the paperwork, they saw that the sale had been done properly and without error. Everything in order, no missing documentation—all taxes paid—escrow closed properly: Everything legit to the last dot. I saw all those documents myself—everything was copacetic.
So they called the Mono County Finance Department—
—and got quite the surprise.
Turns out that in August 2005—18 months after they closed escrow on the sale of the property—the Mono County tax assessor filed an “adjustment” on the property value of the vacation condo they no longer owned.
Based on this “adjustment”, they were found to owe 0 for the seven months that they owned the condo back in 2003. What’s more, since they failed to pay it, they now owed an additional 5 in “penalties and late fees”.
The U.S. Constitution, if you’re curious, is very clear on the issue of retroactive taxation. Article 1, Section 9, Clause 3 states:
No Bill of Attainder or ex post facto Law shall be passed.
Furthermore, Article 1, Section 10, Clause 1 reaffirms the prohibition on ex post facto laws—including ex post facto taxes.
But an ex post facto “adjustment”? Well, the Constitution seems pretty vague about an adjustment—or at least that’s what the California Revenue and Taxation Code seems to think, and would have us all believe.
