Maryland payroll service sued for allegedly keeping taxes
A Bel Air company that handled payrolls for many employers in the area is being sued by clients for allegedly stealing years of tax payments rather than sending them on to the tax collectors as required -- leaving the companies on the hook.
"It made me sick to my stomach," he said.
The IRS waived some but not all of the penalties and fees, he added.
Benfield said the payroll company owners "were driving very nice cars," including Jaguars and BMWs, and "had very nice houses."
Animal Emergency Hospital said in its suit, filed Wednesday, that AccuPay "repeatedly and regularly" failed to pay or made only partial payments of federal and state withholding and unemployment taxes over the past five years, even though the payroll firm withdrew the full amounts from the hospital's account.
Animal Emergency Hospital alleged that about $89,000 was not passed on, and said it owes "substantial" penalties and interest. An official at the veterinary hospital declined to comment Friday; its attorney did not return telephone calls.
Shortly after the case was filed this week, Harford County Circuit Judge William O. Carr ordered AccuPay to preserve all documents and records relating to its operations.
A third suit, filed Friday by the Towson law firm of Mark Van Bavel, seeks $30,000 in damages against AccuPay for allegedly underpaying the firm's withheld taxes. Van Bavel said in an interview Friday that the amount is a placeholder -- he doesn't know how much he might be out, but he wanted to file the suit quickly "in case I have to get in line."
He said an AccuPay employee called his three-person office in tears on Thursday to alert him that the payroll firm was closing.
Levine said his clients, including two restaurants and another animal hospital, might not file lawsuits because of a low likelihood of recovering the losses. But he said he expects additional lawsuits to be filed.
He said he hopes attorneys working on behalf of AccuPay clients can coordinate their efforts to try to put the company into receivership. Like DuClaw's attorney, Levine is worried about a ripple effect if many business are forced to essentially pay taxes twice.
Both the IRS and state tax collectors said Friday that they're legally unable to comment on individual tax matters. But the Maryland comptroller's office and the state Department of Labor, Licensing and Regulation said they were aware of the situation and urged companies to call if they believe they have tax problems.
The comptroller handles income tax withholding, while the labor agency oversees unemployment-insurance taxes.
"We will work with any employer who has difficulty making the payments," said Julie Ellen Squire, assistant secretary of the labor department's unemployment insurance division.
The state can waive penalties and interest in some cases of unpaid unemployment-insurance taxes, and no-interest payment plans are available, she said.
In its suit against AccuPay, DuClaw said it had used the company for payroll services since 1995. DuClaw alleged that it received warnings of deficient or no payments from the IRS and the state in the last several years, but in each case AccuPay said the tax collectors "were at fault and that it would reconcile the account."
AccuPay did not take care of the problem, but it did change its client's address on file with tax collectors so the notices then went to the payroll company, DuClaw said in its lawsuit.
DuClaw alleged that AccuPay's Ponzi scheme fell apart because it lost clients in the recession, "making it more difficult for Defendants to cover the payroll gap."
AccuPay twice forfeited its state certification to operate in Maryland -- in 1991 and 2006 -- for failing to file property returns, according to Maryland Department of Assessments and Taxation records. In each case, the company was reinstated.
Its website, now offline, had earlier declared that the company delivered "peace of mind" to clients.
"If you process your own payroll, you owe it to yourself to see how AccuPay can save you time and expense, and free you from your payroll headaches," the company website said.
William Seccurro, a retired Harford County Chamber of Commerce president, is a former client and said the allegations shocked him. He said he had no problems with the company in his 10 years at the chamber.
