Oh, please Mezzo, you are jumping the gun with your preconceived ideas without even reading the article, and resorting to the cheapest trick in the book, straw-man argument. Nobody is suggesting to selectively enforce statutes for "sympathetic characters."
However, no, $134 tax deficiency is not "just like a larger one." Nor is $0.80 (yes, eighty cents) that triggered a foreclosure in another example. Law recognizes degrees in breaking it in many other cases. There is a different penalty for speeding more than 5 miles above speed limit and speeding 30 miles. In many cases, speeding not more than 5 miles would not even trigger penalty. If you steal something, there is scale of punishment depending on the amount. If you are found with drugs on you, there is a different treatment for different amounts.
There is a legal principle of extenuating circumstances (like dementia in the OP case). Then there is that legal principle that punishment should fit the crime. There is another legal principle that prohibits cruel and unusual punishment. If you do not think that taking away a home worth $200,000 to $300,000 dollars over a couple of hundred or even thousand dollars is not "cruel and unusual punishment," then YOU deserve a cruel and unusual punishment.
But lets for a second accept, for the sake of argument, that it is ok to sell a $200,000 home to collect $134 debt. Should not then the proceeds from the sale go to pay the debt, but the rest (the huge rest) go back to the original owner? In which case the offender would end up with a hassle and and a smaller home, but not homeless.
There was this case
recently (and ongoing) where an active-duty soldier lost $300,000 home over $800 debt to a homeowner association, where the HOA sold it for $3,500 (yes, three thousand).
It is not about "sympathetic characters," it is about predatory collection methods and the governments that use them.
If you do not see a basic human injustice, the cruel and unusual punishment, in those cases, then we really have nothing to discuss.