The court denied our appeal and upheld the decision of the Consulate. We were devastated. Once the shock wore off, we were able to piece things together and now it all finally makes sense, including the adversarial attitude of the kid behind the counter on the day we applied.
It has occurred to us what may be going on. Those with European Union passports who buy a home in Italy pay only a 2% property tax (if they choose to use it as their permanent residence.) They do not need to apply to a Consulate for a visa because they can travel freely between all the countries in the Union any time that they want. As Americans, we cannot.
We would, as residents, get the benefit of the 2% tax (as opposed to 9%) as long as we moved WITHIN 18 MONTHS of the purchase. After 18 months, the 9% tax takes effect.
Since those people who do not require visas get this reduced rate all the time, is it possible we are being deliberately delayed so that we have to pay the higher tax rate? It makes sense. We were notified of the initial denial just one week ahead of the 90 day limit. The court delayed the appeal the maximum of two times. The Consulate did not respond to the court until one week before the last, final court date. Everything has been dragged out to the maximum. It appears we have to make up the shortfall in revenue due to the foreign residents who can move freely and take advantage of the 2% tax.
So, we will wait. It was never our intention to save or "get away with not paying" any taxes. We simply found the perfect little place in the perfect little town where we wanted to live. If the price of admission is to pay a higher tax, we will gladly do that. If it would have helped, we would have paid it right away, but that is not how things work.
We will wait until we have back taxes that are not confusing and "steady and sufficient income recurring over time." If at first you don't succeed, try, try again. **sigh**