How would you handle this trash neighbor?

An elderly woman who lives by herself next to me, who has a mentally ill daughter (psych ward level). She likes to manipulate the people in our neighborhood and lie/gossip about the ones she doesn't like. Whenever I'm outside talking on the phone, she'll go out on her porch to shout out random bullshit. Yesterday when I was walking my dog I overheard her talking to her daughter over the speaker phone about "sibling sex". Who the fuck talks about shit like this? I really want to report this woman, get her checked out because I don't think she's mentally sane. Although idk if it'll work because she is a manipulative and psycho narcissist. I've been ignoring her for the last 3 years now and I'm thinking about calling the adult protective services on her. Can anyone share some insight? any better ideas? Maybe buy a proper audio recorder, get her bullshit on tape and report to police? What would you do about this annoying, toxic, narcissist of a woman? Note that I haven't said a bad thing about her, or to her. I've never bothered her or did anything shitty to her. Yet she seems to enjoy doing it to me. Suggest me something, please.

Sorry for the wait! Not enough posters playing respondents at the mo. Please bear with us and someone will respond (When, not If). :)

Hi BlahblahBBBBBBB, I've been in a very similar situation to you. My last neighbour in UK was a bitter, twisted Narcissist as well. Even regularly tried to Tresspass on my property. I put her back in her place by taking the piss out of her, each and every time, either very audibly from over the fence or to her face. She soon shut up. HOWEVER, she then picked on other neighbours, who weren't as ready to stand up for themselves. And guess who they'd come to to tell and ask for advice. Yup - muggins, here. I also reported her to the Council. She started putting her THREE wheelie-bins onto my white-gravelled front path. Even I didn't put mine there because the dustmen would end up dragging/scraping off too much of the gravel and I had to keep buying more to replace it. The Council were very sympathetic (in terms of the psychological warfare) and happily reminded me that binmen aren't allowed to collect a resident's bins that are on private property, we were supposed to leave them on the public kerb or roadside, and sent her a letter to tell her that for as long as she left them there, the binmen would be instructed not to touch/empty them. The trick is to whistle-blow and enlist help. Because Bullies rely on your silence (and inhibitions against being rude back). Adult Protective Services. (So you're in the US?) Yes - definitely worth a try. For, as you see - ignoring them doesn't work. Makes them try even harder, in fact. So unless you can ignore her for ANOTHER x years - report her for Antisocial Behaviour (in public). Yes also to the audio recorder (and CCTV camera?...especially that'd be visible to her and pointed just enough in her direction without being deemable as violating her privacy?). And no. You don't have to have done or said anything. They're bullies. And they're Pathologically Bored and Envious. Nnnot a good combination. I take it your house and/or garden "make" hers look Less Than? Or you yourself do? Yes, they do enjoy it. They need it. They need a secret, out-of-sight, personal toilet to vomit their self-ever-generating toxins into so that to those they DO still want to impress, they appear normal and NOT regularly vomity. Does that make sense?

Hey Blahblah! So how's it been going with your de-light-ful neighbour since you posted?