Tax Auction Surplus Is Just Compensation, US Tells Supreme Court

The surplus proceeds from an auction of foreclosed tax-delinquent property is just compensation under the Fifth Amendment’s takings clause as long as the sale was conducted fairly, the federal government told the US Supreme Court in an amicus brief.

Foreclosed property is distressed and worth less due to the foreclosure process, the US said in the brief.

“In a long line of statutes, Congress has repeatedly recognized that when the government sells property worth more than what the taxpayer owes, the taxpayer is entitled to compensation in the form of the surplus proceeds from the sale,” the brief said. ...