Tax seizures termed a last resort
Bright yellow signs with “seized” emblazoned across them in inch-high capital letters are a last resort, not a scarlet letter to shame delinquent taxpayers, the state’s civil tax enforcement manager says.
“It takes quite a bit before we have to resort to seizing a business,” enforcement manager Michael Fitzgerald said Monday. “Multiple letters, phone calls, agents talking to folks — we’re going to do everything we can, ANYTHING we can, to avoid a seizure.
“The most important thing to us is to make every effort to avoid a seizure, to make sure we go above and beyond to try to work something out that will keep people up and running.”
With delinquent tax warrants, mainly for sales taxes, currently levied against more than 10,000 businesses statewide, including 34 in Marion County, Fitzgerald’s agents try to work out payment plans first.
“If we can get to the point that we see we’re going to be able to work with someone, we don’t go to the extreme,” he said.
Fitzgerald’s department posts two different colors of seizure notes — yellow ones and red ones. Although the text and design are identical, the yellow ones — like those posted on Cindy’s Family Café in Marion last week — reflect hope that the seizure can quickly be resolved, as it was with Cindy’s less than 48 hours later.
Red notes indicate that tax collectors fear there will be no option but to force sale of the business’ assets.
Despite his role as the ultimate arbiter of whether a court-issued warrant results in a seizure, Fitzgerald is sympathetic to business owners.
“It’s very easy to get behind,” he said. “The biggest problem is to not comingle sale tax receipts with other receipts.”
State law requires that taxes collected on sales be segregated from other revenue, but many new business owners don’t know to do this and are caught without sufficient money set aside to remit taxes to the state when they are due.
Despite their bold design, notices placed on doors and windows of seized businesses are not part of an attempt to shame business owners into paying their taxes, Fitzgerald said.
“I don’t look at that as a scarlet letter,” he said. “The intent is not for us to say, ‘We gotcha!’”
Rather, the notices, which include contact information for his office, are designed to notify and protect the interests of other stakeholders who may have an interest in the business’ finances.
Still, the Kansas Department of Revenue, where Fitzgerald works, does publish online a complete list of all businesses with outstanding tax warrants levied against them.
The overall number — more than 10,000 statewide — is about the same year to year, he said.
“The vast majority of them, we’re working with them to get the debt paid off,” he said. “It’s only when we can’t seem to get through otherwise that we have to turn to seizure.”
As of Monday, Cindy’s and its owner, Cynthia Taylor, were still on the list as owing $3,259.81 in unpaid sales taxes on one warrant and $11,070.19 on another, both from 2013.
The former owner of a previous restaurant at the same site, Tammy Hinton of Florence, doing business as Stone City Café, also is on the list as owing $10,014.45.
As of Monday, these additional Marion County businesses were on the list as having outstanding tax warrants against them:
STATE TAX WARRANTS
Brent D. Baker and J & B Tire, Burns — $5,005.69 in sales taxes from 2011 and $20,348.69 in sales taxes from 2010.
Stewart and Lana Bichet and ASAP Autoglass of Hillsboro — $27,213.80 in sales taxes from 2013.
Aimee L. Brown and Aimee’s Landscaping, Peabody — $7,438.80 in sales taxes from 2013.
Lloyd M. Davies and Great Plains Computers and Networking, Marion — $2,833.44 in withholding taxes and $7,392.01 in sales taxes, both from 2011.
Jamie L. Eickleberry, Florence — $13,915.16 in withholding taxes from 2012.
Mary A. Fistler and Ann’s Auto Repair, Peabody — $2,787.81 in sales taxes from 2012.
Ida M. French and Zimmerman’s Deli and Coffee Shop, Marion — $15,154.48 in sales taxes from 2012 and $8,515.67 from 2013.
Lola S. Harold and Angels, Ramona — $12,122.47 in sales taxes from 2009.
Denzel W. Lake and D&S Technologies, Marion — $7,293.32 in sales taxes from 2010.
Sammi L. Stafford and Coneburg Inn, Peabody — $10,543.60 in sales taxes from 2012.
Arlie E. Overton and Arlies Inc., Marion — $23,139.63 and $11,473.83, both in sales taxes from 2011, and $29,304.16 in sales taxes from 2013
Kevin L. Tidwell and Kevin’s Automotive Repair, Hillsboro — $3,606.19 in sales taxes from 2014.
Royce D. Webster and Southwind Performance Cycles, Hillsboro — $2,793.68 in compensating use taxes from 2009.
The department also lists 26 income tax warrants against individuals in Marion County. The full list is at http://www.kdor.org/warrants/.