04/20/05 — Councilman has trouble with taxes

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Councilman has trouble with taxes

By Barbara Arntsen
Published in News on April 20, 2005 1:47 PM

A Goldsboro city councilman had to pay Wayne County a $1,000 penalty after writing a bad check to pay his property taxes.

In January, Councilman Chuck Allen sent the county a $15,000 check.

Allen's check bounced, and the county sent it through the bank a second time, thinking there might be a mistake.

"When we receive notification of insufficient funds in the tax office, we run the check through a second time," County Manager Lee Smith said. "Then, if the check still comes in with insufficient funds, we send a certified notice to the person telling them of the worthless check, and the penalty."

Taxes are due in September, but property owners can pay until Dec. 31 without accruing interest. The county begins charging interest for payments received after Jan. 5.

State law says that the penalty for writing a bad check for taxes is $25 or 10 percent of the amount of the check, whichever is greater. The maximum penalty is $1,000.

That penalty is in addition to any criminal fines that would apply to any worthless check charges. No criminal action was taken in the Allen case.

Allen admits that he had trouble meeting his tax obligations and added that the $15,000 payment was one of several he made around the state to satisfy property tax debts.

"I am not an average taxpayer," he said. "I own property in seven counties. My tax bill was more than $100,000."

He said a tough business year made the Wayne County bill a difficult one to handle.

"I just did not have the money to pay all of them, so we made $10,000 to $15,000 payments as we could," he said. "We also paid all the penalties and interest."

The bounced check in Wayne was one of those payments.

'We wrote a check to the county for $15,000. When it hit the bank, the bank had deducted $5,000 for a payment my bookkeeper did not know about," Allen said. "My banker was not in that day, so the check was returned."

Allen said his banker called the next day to report the returned check.

"By then, it was too late, it had already been processed," Allen said.

Allen said he called the county and was told he would have to pay the $1,000 fee.

"I told the girl in the tax office that I was not going to pay that much," he said.

He said he called the county manager, who told him he would reduce the fee to $150. Allen said he had a tax credit, so he did not worry about the fee.

But Smith called the next day to rescind the offer after checking with other officials and finding out that he could not make an exception.

Allen said he then paid the full penalty.

Allen said all of his tax obligations, other than $18,000 he still owes the county for business equipment taxes, have been satisfied.

He did not excuse his behavior.

"I did not pay my taxes on time. It is not something I am proud of," Allen said. "I do apologize to my family, friends, constituents and business partners for any embarrassment."

He said he will use the experience as he continues to serve on city council.

"Being a small businessman makes me a better councilman," he said. "I know what it is like to make a payroll on Friday. I understand what it is like to pay taxes, and I know what it is like to struggle through hard times."

Smith said that the county's primary interest is collecting its taxes, and that tax officials normally do not pursue worthless checks by filing criminal charges.

"We have certain remedies that we work on first if we don't get payment or if we get a check for insufficient funds," he said. "If we have the Social Security number, we'll go to get money from bank accounts, or rental proceeds."

Smith said the county also would get its tax payments from the person's federal or state tax refund, if there was one.

He said that when people realize that their bank accounts may be garnished, or as a last resort, that their property may be seized, the payment normally is made.

"That usually helps to get the money in," he said.

Smith said that it was "very unusual" to get bad checks on large accounts.

"We immediately start working on getting our money through the various remedies open to us when it's a large amount," he said. "We go after those first because it has a big impact on the collection rate."

"The process is the same for all people," Smith said. "It's a rarity on tax payments to get a worthless check, especially for a large amount."

According to records in the county tax office, Allen paid more than half of his outstanding $15,000 bill by mid-February. The remainder, plus the $1,000 penalty, was paid on March 28. He had until March 30, or he would have appeared on the delinquent property tax list published in the newspaper April 10.

He also paid almost $305 in interest, on land in both the city and the county.

But Allen still owes the county more than $18,000 in taxes on his business equipment.

State law does not require that counties advertise delinquent taxes for vehicles or business equipment.

A handful of other elected officials within the county owe $300 or less for vehicle taxes, but most of those bills are less than two months overdue.

The county will use every method available to collect that money, Smith said, and interest continues to accrue on any outstanding debt.

The county is serious about tax collection, with last year's collection rate at almost 96 percent. Smith expects the rate to increase this year.

"Everybody is treated the same," he said.

Editor Renee Carey contributed to this story.