Sure, if someone has an asset that they aren't paying taxes on you can put a lien against it or maybe even take it in forfeiture. You absolutely can't keep the entirety of the proceeds from a sale above what's owed and maybe the funds for running an auction.
In the end I think they have a fair legal case for recourse. There's no criminal violation and a civil violation isn't enough for complete asset forfeiture.
That's the case with asset forfeiture(there have been many cases where police have literally used that legal tool to have a better salary), fines on poor people(reason literally covered a case about it today) and other methods.
I say this from experience - American police are all shitbags working to enforce the law, not to "Serve and Protect". That Serve and Protect dissipates really fast, when you're mugged... and materializes really fast when a citation is possible.
But I don't think the whole law is bad because of a couple of mistakes. There should probably be a system to stop seizures from happening over honest mistakes, but the law itself seems like a good idea. We don't get rid of murder laws because sometimes we convict the wrong people, for example.