City Accused of Using ‘Scare Tactics’ To Get Back Unpaid Cigarette Taxes
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The chairman of the City Council’s Finance Committee says the Bloomberg administration is using “scare tactics” to recover millions of dollars in unpaid taxes from residents who bought discount cigarettes on the Internet.
Council Member David Weprin of Queens criticized what he called a “threatening” letter that the Department of Finance sent to thousands of New Yorkers last month. The city obtained purchase information and the addresses of the city residents as part of a legal settlement with an online company, esmokes.com, which sold untaxed cigarettes.
In many cases, residents had bought dozens of cartons of cigarettes and owed more than $1,000 in back taxes. The letter stated that they had 30 days to pay the taxes or risk facing hundreds of dollars in penalties, litigation, and liens against their wages and bank accounts.
“Such actions would damage your credit, making it difficult to buy a home or obtain a loan,” the letter, signed by an assistant commissioner for tax enforcement, Carlton Butler, warned.”We do not want to take such drastic steps, which is why I strongly urge you to pay the amount listed above — without interest or penalties — within 30 days.”
Mr. Weprin said the city should demand more money from the Internet retailers, not go after “innocent victims” of their deceptive sales pitches, which included no disclaimer that consumers were liable for state and city taxes on the cigarettes they bought. “It’s great that the city is collecting revenue,” Mr. Weprin said at City Hall yesterday. “They shouldn’t be doing it with scare tactics.”
Recipients of the letter who call the city’s Finance Department can work out a payment plan over several years, but that is not stipulated in the letter,
“We did not make that clear in the letter. To be honest, perhaps we should have,” a spokesman for the Finance Department, Sam Miller, said.
Mr. Miller said about 12,000 bills would go out seeking a total of nearly $4.5 million in taxes.The city is also trying to collect taxes from tens of thousands of other residents as a result of settlements with other online cigarette retailers. It has already collected more than $1 million.
