Originally published December 17 2014
Courts rule Philadelphia man must pay $280,000 that he does not owe
by J. D. Heyes
(NaturalNews) Though it was reluctant to do so, a Pennsylvania court has issued an order that requires a Philadelphia man to pay hundreds of thousands of dollars worth of taxes that he doesn't even owe.
As reported by PennLive.com, Commonwealth Court imposed the order for $280,772 in taxes on Nathan Lerner, even though city officials had acknowledged on the record that the tax bill he received was a "jeopardy assessment" that was based on pure fabrication.
"The problem is that Lerner didn't follow the right procedural course in challenging it, a Commonwealth Court panel found in a ruling issued [recently]. And so, the state judges determined, he's stuck with that unfounded tax tab," PennLive.com reported.
The Philly man's saga demonstrates just how complex the tax appeals system has become in the state, as well as how tough it can be to navigate it -- and the consequences of not doing so correctly, as well as disobeying court orders.
Basically "just makes them up"
Initially, the report said, Lerner tried to address the appeals process without a lawyer -- a near-impossibility these days for most people because of the overly bureaucratic tax system -- after the city filed a complaint against him in 2009. Then, city officials alleged that he owed more than $200,000 in unpaid business privilege, wage and net profit taxes for the years 2003 and 2006. However, the figure was not based on any factual information.
As further reported by PennLive.com:
Philadelphia has a policy of sending out tax delinquency notices with fictional "jeopardy assessments." Those assessments aren't based on any actual tax determination, and are set deliberately high to induce the targeted taxpayer to contact the city's revenue department to determine the true amount of tax owed, Judge Mary Hannah Leavitt wrote in the Commonwealth Court opinion on the Lerner case.
The city's revenue collection manager, Denise Reynolds, testified to that fact during a Philadelphia County Court hearing on the Lerner case in 2013. Leavitt pointed out Reynolds' testimony in her court order.
When an attorney whom Lerner eventually retained asked Reynolds whether the jeopardy assessment "is just something you make up to scare the taxpayers to come in," Reynolds responded, "Basically, yes."
When questioned further about where the numbers for such assessments come from, Reynolds responded that her manager "really just makes them up."
"We try to make it really high," she said. "We want them to come in and make sure the figures are accurate."
Practice may "lack authority in law"
Leavitt further noted Lerner's assertion that he didn't really owe any of the taxes that were being sought by the city, claiming that he didn't even own a business and that he lives primarily on Social Security income. In a footnote to her ruling, Leavitt included the city's claim that Lerner had a business partnership with another man who had been making payments to him. For his part, Lerner did not provide the city with any financial records.
Court filings acknowledged that Lerner indeed made some legal mistakes while attempting to battle back against the tax judgment without an attorney's assistance. The fatal mistake, the Commonwealth Court found, was that Lerner failed to obey an order from county Judge Leon W. Tucker to pay for a transcript of a city Tax Review Board hearing on his case.
His refusal to do so left Tucker -- though he found the city's tax figure to be "unsupported by any evidence" -- with little choice but to dismiss Lerner's tax appeal on grounds that he had thus waived his right to challenge the validity of the city's phony assessment.
Leavitt concluded that her court is therefore "constrained" to uphold Tucker's "reluctant" decision.
Nevertheless, Leavitt wrote in her ruling that Lerner's "challenges to the city's 'fictional' assessment may have merit; the city's strong-arm collection tactics may well lack authority in law."
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