A taxing situation for a Long Island man

April 23, 2009 9:45:07 PM PDT
For five years now, a Long Island man has battled the state tax department. It's ruined his credit rating and cost him tens of thousands of dollars, and all because of a tiny debt dating back three decades.

With New York desperate to fill its empty coffers, the tax collectors are reaching way back and going after the smallest of debtors, using heavy-handed tactics to get what it thinks is theirs.

"This is legal governmental extortion," Gary Westwood said.

This retired FDNY firefighter has a kitchen table filled with tax warrants, legal documents, and notices of seized assets. A red tape hell that started back in 2004.

"I get a notice that my tax refund will not be forthcoming from the state it is being applied to other tax liability," Westwood said.

That other liability was an unpaid sales tax of $23-hundred dollars that dated back to 1978 when Gary Westwood owned a restaurant. But the state Department of Taxation and Finance waited 26 years to inform Westwood he owed the back tax. All during that time, penalties and interest piled up ballooning the 23-hundred dollar debt to $64-thousand dollars. "They went after my bank accounts. They went after any monies I had. They went after my stock and bonds," he explained.

Making matters worse, since Westwood had sold the restaurant back then, he didn't owe the state a dime. But the state's tax enforcement office kept sending him tax warrants and continued seizing his assets -- $24-thousand dollars in assets. He finally found an attorney gutsy enough to take on the tax bureaucrats.

"In Gary's case, they've been collecting from him for years, garnishing wages, garnishing other payments to him, even taking his tax refunds that Mr. Westwood was entitled to," Jack Trachtenberg of Hodgson & Russ explained.

Westwood's attorney says he's noticed a significant increase in these kinds of cases.

"They're digging up more cases and going after them more aggressively, so you might surmise that it's a revenue issue or driven by revenue needs," Trachtenberg said.

A tax court finally agreed with the attorney that Westwood never owed the state any money. The Department of Taxation and Finance was ordered to "cancel in full" all of his client's tax liabilities and refund his seized assets.

Even though he won, Westwood has still not gotten any money back.

"Eleven months later, no idea if it will ever come. My lawyer bills me monthly for phone calls, letters and faxes requesting the status of the refund. Not very forthcoming. This is our state, our government," he said.

Meanwhile, it's been almost a year since the state was told to pay-back Westwood. The tax bureaucrats so aggressive when mistakenly seizing his assets, now seem in no hurry to give his money back.

"I'm really dismayed. If this is all they can do with a small thing like this, imagine something important," Westwood said.

Here's the good news. Forty-eight hours after we called the State Department of Taxation and Finance, a spokesman there told us all Mr. Westwood's tax warrants have been cancelled and they plan to expedite his total refund.