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Betty The Restauranteur

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  • #16
    Betty has multiple state (MN, to answer taxguykarl's question) and federal tax liens on her credit report. We have received many liens and garnishments, and we send as much money as Betty has in her checking account, which is usually only a couple hundred dollars. I don't know how much this has affected the employee turnover rate at Betty's, but I can't imagine it helped.

    The 90-day extension is on the house loan, which is not in danger of being tax forfeit for real estate taxes. The restaurant loan is separate, and doesn't mature for nearly a year. The restaurant property will go tax forfeit before the loan matures. To prevent a loss for the bank, we sent a pre-foreclosure letter that will expire in January. Betty has until then to pay the real estate taxes, or we'll start foreclosure proceedings. The county will start the tax forfeiture process in May if all the back real estate taxes aren't paid.

    I think I mentioned in the previous threads about Betty that we have, in the past, advanced funds on the restaurant loan to pay federal and state taxes and real estate taxes. We did that to prevent having her from losing her business, but it has instead given her the expectation that we will pull her out of the next jam she gets herself into. When the new bank took over (about 4 years ago, now), they put a stop to that practice.

    I haven't been to Betty's in over a year, but from what I hear, she has good food and brisk business. I think her issues lie more in money management than restaurant management.

    The husband still hasn't come in to sign the extension documents for the house loan. I still intend to tell him about the restaurant going tax forfeit next year. Both because it's public record and because real estate is automatically owned jointly by spouses in MN. He is equally as responsible for the restaurant property as she is. I suspect she doesn't want me to tell him because she wants to avoid the argument it will cause.
    Last edited by Ghel; 11-18-2014, 04:17 PM.
    "I look at the stars. It's a clear night and the Milky Way seems so near. That's where I'll be going soon. "We are all star stuff." I suddenly remember Delenn's line from Joe's script. Not a bad prospect. I am not afraid. In the meantime, let me close my eyes and sense the beauty around me. And take that breath under the dark sky full of stars. Breathe in. Breathe out. That's all."
    -Mira Furlan

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    • #17
      Quoth Ghel View Post
      The husband still hasn't come in to sign the extension documents for the house loan. I still intend to tell him about the restaurant going tax forfeit next year. Both because it's public record and because real estate is automatically owned jointly by spouses in MN. He is equally as responsible for the restaurant property as she is. I suspect she doesn't want me to tell him because she wants to avoid the argument it will cause.
      Of course she doesn't want him to know. I wouldn't be a bit surprised if she's living well above her means and is robbing Peter to pay Paul and they're both about to gang up on her now. Or that she somewhere has a huge life insurance policy on her hubby that will give her a big windfall in the event of his unfortunate demise . . .

      Either way, this smells like the buildup of a true crime story or a Lifetime movie.
      Human Resources - the adult version of "I'm telling Mom." - Agent Anthony "Tony" DiNozzo (NCIS)

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      • #18
        Quoth DGoddessChardonnay View Post
        Of course she doesn't want him to know. I wouldn't be a bit surprised if she's living well above her means... this smells like the buildup of a true crime story or a Lifetime movie.
        Oh, undoubtedly, will happen soon. The IRS is probably gearing up to drop the bomb on her. I feel bad for her employees and anyone else who's involved.
        I don't have an attitude problem. You have a perception problem.
        My LiveJournal
        A page we can all agree with!

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        • #19
          That's if the employees are even paid by check anymore, and not under the table in cash...
          My Guide to Oblivion

          "I resent the implication that I've gone mad, Sprocket."

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          • #20
            Quoth taxguykarl View Post
            Sorry, but he's correct. The one earning the income, employees in the OP, are responsible for the taxes ultimately. Yes, they can set up an offer in compromise or even take the matter to a tax court.
            FWIW, the "employer half" of which Eric speaks is, in fact, the social security and medicare taxes that match the amounts withheld.
            Crap. Let me guess, if they sue her for not paying their taxes, she will declare bankruptcy and they will not get a thing (because employees are on the bottom of the debt collection ladder, and of course she owes everyone money).

            Well, then this has made me more grateful of my excellent employer.
            I might be crazy, but I'm not Insane.

            What? You don't play with flamethrowers on the weekends? You are strange.

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            • #21
              Quoth Gilhelmi View Post
              Crap. Let me guess, if they sue her for not paying their taxes, she will declare bankruptcy and they will not get a thing (because employees are on the bottom of the debt collection ladder, and of course she owes everyone money).
              She has declared bankruptcy in the past, but it was a chapter 13 (IIRC), which means her debts were not discharged. She made payments to the bankruptcy court for many years (I want to say 10 years, but I don't remember for sure). She only just finished making those payments a year or two ago, and now she's back in the same situation that forced her into bankruptcy before.
              "I look at the stars. It's a clear night and the Milky Way seems so near. That's where I'll be going soon. "We are all star stuff." I suddenly remember Delenn's line from Joe's script. Not a bad prospect. I am not afraid. In the meantime, let me close my eyes and sense the beauty around me. And take that breath under the dark sky full of stars. Breathe in. Breathe out. That's all."
              -Mira Furlan

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              • #22
                Quoth Gilhelmi View Post
                Crap. Let me guess, if they sue her for not paying their taxes, she will declare bankruptcy and they will not get a thing (because employees are on the bottom of the debt collection ladder, and of course she owes everyone money).

                Well, then this has made me more grateful of my excellent employer.
                While secured loans are above payroll, and payroll is technically lumped in with all other unsecured non-tax debt, on a practical basis, bankruptcy judges usually give employees a larger-than-proportional share of the crumbs left (if any) to help satisfy their back pay.

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                • #23
                  I did some work at one point for a business whose owner was much like Betty. I was young and naive at the time, and eventually wrote off the idea of ever being paid after she "let me go" (I had been lied to and led to believe I had a secure full time position). Surprisingly, I actually got a check in the mail... two years later! Even more surprisingly is that the place is still up and running, and by rumors in the community, the same not-paying-people shenanigans are still going on.

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                  • #24
                    I saw an unpleasant experience at the bank one day. I had gone to pick up a change order, and there were 2 guys in front of me, cashing their paychecks from the same employer. Each gets a different teller, and teller #2 was faster than teller #1 (even though she started the transaction after #1 started).

                    So teller #1 looks over at #2 and asks, "How did you do that? The computer says the bank account is empty." Teller #2 points to her customer. "It's empty now. His paycheck just cleaned it out."

                    The 2 guys stare at each other in horror, one completely paid and the other screwed. I grab my change order and run. Since teller #2 knew exactly what was going down (she made a comment to the effect that the company had been doing slowly going under for a year), I thought it was a little mean of her not to warn everyone what was going on.
                    To seek it with thimbles, to seek it with care;
                    To pursue it with forks and hope;
                    To threaten its life with a railway share;
                    To charm it with forks and hope!

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                    • #25
                      She really can't do too much-there's rules about account privacy and such. So until your check bounces, she probably can't tell you there's an issue.
                      Last edited by MadMike; 11-19-2014, 10:00 PM. Reason: Please don't quote the entire post. We've already read it.
                      Life: Reality TV for deities. - dalesys

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                      • #26
                        You're right, I didn't think about that.
                        To seek it with thimbles, to seek it with care;
                        To pursue it with forks and hope;
                        To threaten its life with a railway share;
                        To charm it with forks and hope!

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                        • #27
                          Quoth winner every time View Post
                          Surprisingly, I actually got a check in the mail... two years later!
                          My first employer took a while for everyone to get their final pay (which came from the bankruptcy attorney). I don't remember whether it was two years.

                          They were kind enough to call the unemployment office to give them a heads up when they told us all we were out of a job. And that office let us count our termination from the day we were supposed to get the final paycheck rather than the day we were told it wouldn't simply be late.

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                          • #28
                            Quoth mhkohne View Post
                            She really can't do too much-there's rules about account privacy and such. So until your check bounces, she probably can't tell you there's an issue.
                            Actually, the teller can't even disclose why the check can't be cashed. There's a number of reasons beyond NSF that could cause the teller software to decline to cash a given check. NSF might be the most common, but it's far from the only one.

                            This reminds me of a situation I handled when I worked at MajorBank. An irate customer wanted to cash her tenant's rent check and we declined to. Our teller software doesn't actually tell the teller why we're declining to cash a given check. Of course, if's it's an on-us check, the teller could just look up the account number, but that would be frowned upon. Anyway, this teller calls my department (why, I don't know, as we didn't normally deal with that sort of stuff), and given that it was a slow day, I try to explain to her that there are numerous reasons she could have been given the do not cash message. Out of curiosity, I looked up the account number. The check was being declined because it was written off an account that was not only closed, but had been charged off several years prior.
                            At the conclusion of an Irish wedding, the priest said "Everybody please hug the person who has made your life worth living. The bartender was nearly crushed to death.

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                            • #29
                              Quoth Ghel View Post
                              She only just finished making those payments a year or two ago, and now she's back in the same situation that forced her into bankruptcy before.

                              Those who cannot remember the past are condemned to repeat it.
                              -- George Santayana
                              Seshat's self-help guide:
                              1. Would you rather be right, or get the result you want?
                              2. If you're consistently getting results you don't want, change what you do.
                              3. Deal with the situation you have now, however it occurred.
                              4. Accept the consequences of your decisions.

                              "All I want is a pretty girl, a decent meal, and the right to shoot lightning at fools." - Anders, Dragon Age.

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                              • #30
                                Quoth sirwired View Post
                                While secured loans are above payroll, and payroll is technically lumped in with all other unsecured non-tax debt
                                Tax debts are, of course, expempt from bankruptcy. If the withheld taxes are, in fact, paid from whatever assets the BK estate has; then the employees are off the hook. As the restaurant is losing money (at least on paper) there would be no business income taxes--sales taxes due to MN, but no income tax.
                                IOW, this situation stinks!
                                Last edited by taxguykarl; 11-20-2014, 02:19 PM.
                                I'm trying to see things from your point of view, but I can't get my head that far up my keister!

                                Who is John Galt?
                                -Ayn Rand, Atlas Shrugged

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