What Goes Around Comes Around

by Kenneth Hoffman in

Ask anyone what makes them happy. (Go ahead, see who's around and ask them.) We're pretty sure they didn't say "paying taxes." Most of us just grumble and pay up. But millions of citizens from all walks of life express their unhappiness by choosing not to pay. The IRS currently has over 12 million accounts in collections, with state and local governments managing millions more. That's a lot of money not getting paid.

Of course, tax collectors are hardly powerless to collect those debts. They can garnish wages to pay back taxes. And they can seize property. Usually, this means financial assets like bank accounts, investments, and retirement accounts. But it also includes physical assets like houses, cars, and boats they can sell to raise cash. The IRS has seized less obvious assets, too, such as the contents of an Alabama scofflaw's hair salon, a pair of Boston parking spaces that sold for $280,000 each, and even $2 million worth of annuity payments that used to be New York Mets slugger Darryl Strawberry's deferred salary.  

Now we've learned that a Florida tax collector is taking aim at an even bigger target. Last month, Escambia County Tax Collector Janet Holley filed suit to seize the 200-foot-tall Skyview Ferris wheel, which has thrilled riders since 2013 near Atlanta's Centennial Olympic Park.

The Ferris wheel features 42 climate-controlled gondolas, including a VIP car with leather seats and glass floors. And it's enjoyed a scenic ride of its own. It originally opened in Paris, across from the famed Louvre museum. Then it moved to Bern, Switzerland. Then it crossed the Alps and the Atlantic for a year-long stop in Pensacola, Florida before finally settling in "the ATL."

Here's where taxes step aboard. When the wheel landed in Pensacola, it became subject to Escambia County property tax. The county assessed the wheel's value at $11.4 million, then billed the ride's operator $237,000. That company, Expo 60 Ventures LLC, has since gone out of business and dissolved. However, Florida law lets the tax on tangible property follow the property, in addition to the owner, which makes the wheel itself still subject to seizure. What's worse, interest and penalties have rolled the bill up to $350,000!

The wheel's current operators are quick to defend Atlanta's newest overpriced tourist trap scenic attraction. A spokesman says "This is a vendetta by a public official who's up for re-election in Pensacola, Florida. Pensacola has always been angry that this wonderful icon left their city and came to Atlanta." Having said that, they also paid $50,000 towards the debt. "Our only contention is that they're charging some ridiculous penalties and interest and things like that on the taxes, and we're willing to pay those as soon as the court tells us that that's what we have to pay," he added. (Doesn't exactly sound "willing" when you put it like that!)

Of course, the county doesn't really want to take possession of the Ferris wheel, not any more than the IRS really wanted a couple of parking spots in Boston. They just want their money. (We can just imagine Pensacola's roughest, toughest repo man gulping in disbelief when he gets this assignment!)
Ferris wheels are fun, but in the end you just wind up back where you started. That's fine for a scenic ride, but it's not good enough when it comes to your taxes. What you need is a plan. Whether you're running a business, managing a portfolio, or just raising a family, we can give you that plan — and you can save the thrill rides for the amusement park, not the IRS!

Let's Talk! For a deeper conversation on our services, or to become a client, call Kenneth Hoffman at (954) 591-8290 Monday - Friday for a no cost consultation, or drop me a note.

Kenneth Hoffman of K.R. Hoffman & Co., LLC is a highly sought after tax and business counselor. As a trusted senior advisor and counselor working closely with Entrepreneurs, Professionals and Select Individuals, Mr. Hoffman provides counsel to his clients who are navigating through the complexity of today's business, tax, and accounting challenges.

Click here to schedule an appointment with Kenneth Hoffman.

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