Category: Multiple taxes
Posted by Robert Snell on Thu, May 15, 2008 at 5:16 PMWest Bloomfield trustee disputes debt
Robert Spector owes $5,637: The West Bloomfield Trustee was elected with three fellow Democrats in 2004, a group quickly tabbed the "Gang of Four" by detractors. Spector, 64, who is married to Oakland County Commissioner Karen Spector, filed for re-election before Tuesday's deadline and faces opposition for his seat.
What's owed:
- Michigan filed a $5,637 lien against Spector on May 17, 2006, for unpaid sales and withholding taxes.
His side:
Spector said he does not owe that amount in taxes and his attempts to clear up the lien have been fruitless. He would not say specifically how much he owes.
The troubles surfaced after a debilitating car accident in 1998 that forced him to sell his wholesale auto parts company in Detroit. The state originally claimed he owed more than $20,000 and he tried fighting it then, he said. His accountant and bookkeeper said the amount listed on the tax lien was wrong, but Spector said the state wasn't listening.
"Every time I told them it was a mistake, they were oblivious to it," he said.
Now, he can't prove the lien is wrong.
A 2003 electrical fire damaged the Detroit building where Spector stored his tax records, he said. So he stopped fighting, figuring he'd stop wasting money paying an accountant to protest the lien.
"I told (the state) show me where I owe the money and their argument was 'Show us you don't owe the money,' " he said.
The state Treasury department does not talk about individual tax cases.
Meanwhile, the state continues to seize a portion of his and his wife's joint tax refunds, he said.
"I'm not going to dispute that I might owe them something," he said. "Maybe a couple thousand dollars at best and they've already extracted more than that out of my wife's wages and the little monies that I've made.
"The only thing I can tell you is I take my job with the township seriously. I'm a former businessman and I have only tried to help our community and if this has an effect on my ability to gain enough votes in the coming election, than the public is going to be hurt by it."
Political pastor's group saddled with liens
Group led by the Rev. Horace Sheffield III owes $5,921: Sheffield, who filed Tuesday to run against U.S. Rep. John Conyers, is executive director of The Detroit Association of Black Organizations, a federation of civic, religious and community organizations.
Most recently, the pastor of New Galilee Baptist Church in Detroit has emerged as one of the most vocal defenders of Mayor Kwame Kilpatrick since the text-message scandal surfaced. Sheffield also serves as a fundraiser for the Detroit Justice Fund, which is raising money to pay for the mayor's legal team fighting felony perjury and misconduct in office charges.
What's owed:
- Michigan filed a $5,381 tax lien against The Detroit Association of Black Organizations for unpaid taxes April 23. It was not clear what kind of taxes were owed, though Sheffield said the lien was for delinquent payroll taxes.
- The state filed a $540 lien against the group for unemployment insurance agency taxes on Feb. 29.
Their side:
Sheffield said the group is in the process of paying off the liens and said the amounts are "negligible" considering the group's 30-year history serving the community.
He said the nonprofit organization works based on reimbursements from various sources, which he wouldn't identify. The liens arose from not paying payroll taxes, he said.
Part of the problem was that the group's school had been educating dropout students since last October yet did not receive any payment on its contract with Detroit Public Schools until January.
"If it's a choice between educating kids and having teachers to educate them (or pay the taxes), we'll make that choice until the funding stream flows on a steady basis," he said. "It's in the process of being repaid."
Motown star Reeves owes taxes
Martha Reeves owes $200,559: The 66-year-old Detroit City Councilwoman started her Motown career as a secretary and moonlighted as a background singer before breaking through in the summer of 1963. The earthy singer hit with "(Love Is Like A) Heat Wave," "Dancing in the Street," and "Jimmy Mack" before switching to record company MCA. Martha and the Vandellas were inducted into the Rock and Roll Hall of Fame in 1995.
What's owed:
- Michigan filed a $7,392 lien March 28 for unpaid single-business taxes.
- On May 9, there was a $193,167 federal lien outstanding for unpaid income taxes from 1997-2003. The lien was filed Dec. 26, 2006.
Her side:
Reeves blamed her difficulty paying taxes on a drop in revenue from dwindling record sales and infrequent performances due to her City Council obligations. Any revenue she receives from recording or performing is minimal after paying for recording sessions, hiring musicians and advertising, she said.
"That's how I got in debt," she said.
Reeves is paid about $81,000 as a City Council member but the IRS takes most of it to pay off the lien, she said.
"I've been liened on for the last four months," she said. "I'm working almost for free."
She doesn't see any royalties from digital sales on Internet-based stores such as iTunes.
"It's not in my contract so they don't have to pay," she said. "They can use it and sell it but they don't have to pay me a dime."
Below, watch Martha and the Vandellas perform "(Love Is Like A) Heat Wave."
Retired Red Wing pursued by tax man
John Ogrodnick owes $1.3 million: After racking up five All-Star nods, 402 goals and sweet rides like the Buick Riviera pictured at right, the former Detroit Red Wings sniper retired in 1993. The Farmington Hills resident, 48, launched a new career as a financial advisor, according to a profile on the Red Wings Web site. Ogrodnick also was featured in a book published last year about retired Detroit athletes making successful transitions into "normal, everyday lives."
Ogrodnick, one of only six players in team history to score 50 or more goals in a season, remains active with the Detroit Red Wings Alumni Association, which raises money for the needy and amateur hockey.
Tax debt breakdown:
- The IRS filed a $496,967 lien for unpaid income taxes against Ogrodnick and his wife on Nov. 6, 2007. The couple owed the money from 2000.
- The IRS filed a $752,590 lien against the Ogrodnicks for unpaid income taxes on March 12, 2007. The couple owed the money for the years 2001 and 2004.
- The state filed a $12,750 lien against John Ogrodnick for unpaid single-business taxes on Jan. 30, 2007.
- The state filed a $44,124 lien against the Ogrodnicks for unpaid income taxes on Nov. 1, 2006.
- On May 7, Farmington Hills records showed he owed $1,363 in property taxes that support parks, schools and the library. He paid the bill the next day after being contacted by The Detroit News.
His side:
Ogrodnick disputes the amount of delinquent taxes owed to the IRS and said the real figure is about $900,000. For the past year, he has been on a payment plan for the $56,874 owed to Michigan and is close to finalizing a payment plan with the IRS, he said.
Ogrodnick traces the tax troubles to aggressive micro-cap stock deals that would yield inconsistent income from year to year.
"If the deal worked, my clients made a lot of money and I would make commissions on it," he said. "Problem is, the next deal might take five years so my salary goes from extremely high to next to nill."
As a result, he has sought more consistent income by focusing in recent years on more conservative business deals, helping clients prepare for retirement by investing in annuities or helping rollover 401(k) money.
"I'm doing fine. Life is normal," he said. "I want to get everything straightened out. Taxes are taxes. You're not going to get away from it."
Macomb marina drenched in debt
Jefferson Beach Marina owes $775,268: Instead of a swanky $500 million condo development on the shores of Lake St. Clair, the only thing growing on the land is a property tax bill.
Marina owner Alvin Wagner's family took over a waterfront amusement park in 1943 and turned it into a marina a decade later. One of the area's priciest chunks of real estate, the amusement park land was supposed to be redeveloped into One Water Place. Yet the project fell through last year, triggering a lengthy dispute between Wagner and developers Paul Henderson and Guy Rizzo.
Tax debt breakdown:
- On May 9, the marina owed $775,268 in delinquent property taxes, making it one of the largest delinquencies in Macomb County, Treasurer Ted Wahby said. The taxes are from 2006 to 2007 and an appeal is pending before the Michigan Tax Tribunal, Wahby said.
Their side: Wagner's lawyer, James Sullivan, said it was the responsibility of Henderson and Rizzo to pay the property taxes while they leased the site in 2006 and most of 2007. Henderson and Rizzo did not return calls seeking comment.
