Top business tax delinquents total $27 million in outstanding judgments
Philadelphia, November 12 – Mayor Michael A. Nutter announced today that the City of Philadelphia will begin to post judgments of $50,000 and greater against business tax delinquents on its website. The businesses and individuals posted today owe the City of Philadelphia $27 million combined in judgments.
“Taxes that are not paid are resources that we cannot invest in City services, programs and infrastructure and we are going after those who are defrauding the citizens of Philadelphia,” said Mayor Nutter. “We are publishing this list of top tax delinquents to send a strong message to those who would consider not paying their taxes: we know who you are, we know what you owe, and we are going to collect it.”
Many of these judgments are against businesses and their officers who collected taxes from their customers and employees, but failed to send the money they held in trust to the City of Philadelphia. Courts have entered judgments against them, and they have neither made payment nor honored payment arrangements they previously made with the City. Tax revenue contributes to the City’s overall budget, making funds available for City services and programs. Delinquent taxes impact the City’s ability to adequately fund some of these services and programs.
Before posting the lists, the businesses and individuals were contacted by the Law Department on Friday October 24, 2008 and given two weeks to make payment arrangements. Those who have done so, and who remain current on payment agreements, will not be listed. The businesses and officers listed owe about $27 million in business tax judgments. Other States have begun to publish delinquent taxpayer lists and these lists have resulted in the collection of millions of dollars in delinquent tax revenue.
Judgments are public information, recorded in the Prothonotary’s Office in City Hall. The amounts listed on the web site represent the original judgment amounts. The current amount of tax due may differ from the amount listed on the site because of partial payments and/or the accrual of post-judgment interest.
The City currently collects delinquent taxes through other efforts including the use of collection agencies for real estate taxes and payment agreements. This new initiative in addition to the current enforcement programs will enhance the ongoing revenue collection efforts.
The Law and Revenue Departments are collaborating on this initiative and will continue to implement aggressive tax enforcement programs to collect revenue from those taxpayers who owe taxes. Future delinquent lists will include taxpayers who owe less than $50,000 in delinquent business taxes and the list may expand to include other taxes.
The complete delinquent taxpayer list and frequently asked questions (FAQs) can be viewed on the Law Department’s web site: www.phila.gov/law/Tax_Delinquent.html and the Revenue Department’s web site: www.phila.gov/revenue. You may also access the list by visiting the City of Philadelphia’s home page at www.phila.gov and clicking on the delinquent taxpayer list link. The link will take you directly to the Law Department’s web site, which also lists delinquent real estate taxpayers as to which the City’s outside counsel has petitioned for an order directing the Sheriff to sell their properties at Sheriff’s sale.
Delinquent taxpayers who appear on the list should contact Steven Sankey, Tax Collection Coordinator, Judgment Executions, City of Philadelphia Law Department, Tax Unit, One Parkway, 15th Floor, Philadelphia PA 19102-1595, telephone 215-683-5207. The Law Department intends to add new delinquent business tax judgment taxpayers to the lists on at least a quarterly basis, and each month will remove delinquent taxpayers who have resolved their tax liabilities.
Frequently Asked Questions
1. What is considered a delinquent business tax judgment?
The City sues delinquent taxpayers for nonpayment of business taxes, which include business privilege tax, wage and net profits taxes, among others. The Court will enter judgment against the taxpayer in the amount of the tax owing and unpaid, including applicable interest and penalties. The Court may then permit the City to collect from the judgment debtor by having the Sheriff attach the debtor’s assets.
2. Why are some judgment debtors listed as officers or partners?
With certain taxes, such as the wage tax, an employer is responsible to collect the tax from the employee and pay it over to the City. An individual or entity that exercises significant control over the financial affairs of an employer is personally liable for any failure of the employer to collect, truthfully account for, or pay over this tax. See Section 19-1507 of the Philadelphia Code.
3. Why are delinquent judgments being posted on the Internet?
All judgments are matters of public record. They are available in the Prothonotary’s Office in City Hall. The City of Philadelphia believes that the public should know the names of those who have not paid valid judgments against them, and the amounts they owe the City. We intend for these Internet postings to make it easier for the public to obtain this information.
4. What information is being published?
The lists include the name of the individual or business and the amount of the judgment for unpaid business taxes.
5. What criteria are applied to determine which tax debts will be listed?
Cases referred to the Judgment Execution Unit of the Law Department’s Tax Unit have been selected based on the judgment amount of $50,000 or greater. The Law Department has attempted to remove judgments under current payment agreements or subject to bankruptcy proceedings.
6. Can the actual tax debt due be greater than the amount listed on the website?
Yes, the current amount actually due may differ from the amount listed on the site because a partial payment has been made and/or because of the accrual of additional interest, penalties, and costs, since the judgment was filed.
7. Do these lists include everyone owing the City more than $50,000 in business tax judgments?
No. Anyone who has entered into a current payment agreement is not on the list or will soon be removed.
8. Will you post judgments under $50,000?
Yes. We expect to post judgments under $50,000 in the future.
9. Can there be other liabilities with the Department of Revenue that are not listed on the Internet?
Yes. The liabilities listed are at least 90 days past due, concern business taxes, are the subject of a docketed judgment, and are being pursued by the Law Department’s Judgment Execution Unit. The City does not warrant or represent that these are the only amounts owed by a given taxpayer.
10. How do individuals or businesses know their names may be published?
Judgment debtors have received numerous letters before and after judgment. Everyone on the list we are publishing today was also sent a Notice of Publication of Tax Judgment letter, offering a period of two weeks to pay the debt in full or enter into a payment plan.
11. If you are notified that your name is eligible for publication, or your name has already been published, how can you get your name removed from the list?
To avoid posting or to have your name removed, you must pay the debt in full, provide proof of payment, enter into a valid payment agreement, or provide proof of bankruptcy. Your name will not be removed from the list if you make a partial payment without entering into an approved payment plan.
12. Who should be contacted if a name is on the list in error or if you wish to make a payment agreement?
Contact Steven Sankey, Tax Collection Coordinator, City of Philadelphia Law Department, telephone 215-683-5207.
13. How frequently is the data on the delinquent tax debt list refreshed?
Taxpayers who have become compliant either by paying the tax debt in full or entering into a payment agreement will be removed from the list around the end of each month.
14. What is the process for listing individuals and businesses on the delinquent list?
New names of judgment debtors will appear on the list at least once each quarter.
15. What form of payment will be accepted?
The City accepts checks and money orders. It does not accept cash, credit cards, or debit cards.
16. Once a name has been removed from the list, can it be added again at a later date?
Yes, if a check bounces or the taxpayer doesn’t honor a payment agreement, or if the taxpayer loses bankruptcy protection or becomes delinquent on other taxes