Amanda Nowakowski lost her husband to kidney cancer in 2014. In the year after, the widow discovered that the family's finances weren't in order.
When her late husband's business started to go south, he had taken out a loan and cancelled his life insurance.
"My daughters and I were coping just with a barrage of bad financial news," Nowakowski said.
Stuck with his debt, she sold her home and donated her possessions.
As she prepared her 2015 income taxes, however, the high school teacher discovered that she would owe $50,000, which she didn't expect.
"This tax bill was sort of the last straw, I just couldn't figure out what I was going to do," she said.
When Nowakowski had sold her home in 2015, she had sold it in a short sale —under value, with no equity. The difference between the home's value and the sale price was considered income even though she never received any money from the sale.
"That debt, absent any tax breaks in the internal revenue code or the California code, is income to them," said Jamie Ogden, a tax attorney at JMBM. "That's actually phantom income."
California had forgiven phantom income until 2015. It's a practice that the federal government continues to uphold. Last fall, however, Governor Jerry Brown vetoed a bill that extended any state relief. Tax attorneys say there is little a taxpayer can do but pay.
Nowakowski wouldn't have the money to pay. She was a high school teacher who had lost everything.
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Not knowing where to turn, a friend started an online fundraiser. It raised more than the goal in less than 24 hours.
"My reaction was to sit on my bed and just cry and cry. And to recognize that for the first time in two years, I was crying not out of a feeling of hopelessness," Nowakowski said.
Former students shared it on social media and the donations poured in. The money exceeded the amount needed to pay off the bill by nearly $30,000.
Reach Staff Reporter Ryan Thompson here.