City wage tax delinquent bill (Philadelphia, Penn: sales, real estate, 2015)

[Sandr01]

Hello!

I worked and lived in Philly for a little over a year (half of 2014, till Sep 2015) as a consultant, my previous employer did not withhold local wage tax in the paycheck (they are OH based). I received a delinquent tax billing from city of Philadelphia for 2014 and 2015,

1) the amount owed in city tax for 2014 is wrong (the $ checks out for 12 month not 6), the amount for 2015 is also wrong -- I think city tax rate is 3.9% but they've charged over this.

I file with turbo tax, so the city tax was overlooked and my ignorance lasted till I received this mail -- penalty and interest are few $ shy of principal amount how responsible is my employer over this issue? I understand ultimately it was on me to pay it on time, I just didn't know -- would an appeal work to reduce these charges.

I'd appreciate any advice on this matter

[BK_PHL_DEL]

I am going through this process myself - resolving my wage tax owed from 2013 & 2014. I simply did not know at the time about it since my employer is in Delaware. Scan everything to keep as documentation! Here's what I had to do:

1. My contact in this process was Ms. Miller: Naima.Miller@phila.gov. I suggest you email her stating your situation.
2. Complete a petition for appeal: https://beta.phila.gov/media/2018020...for-appeal.pdf.
3. By mail, send 2 copies of the completed petition along with 1 copy of the delinquent tax bill.
4. Wait until they mail you back with a date for a hearing before the Tax Review Board. There is no way to track the status of any of this online; you just have to wait and have faith.
5. In the meantime, I sent a check for ONLY the principal amount due. It posted before my hearing date and was a sign of good faith that I paid in full and promptly.
6. Go to the hearing. It is in a building on the corner of Broad and Walnut. The hearing itself is no big deal; you just sit before an arbitrator and plead your case. Be truthful and respectful. I told them I simply did not know about the tax because I had just moved to Philly and worked in DE and did my taxes myself for free online since my salary was low enough at the time. The decision I got right then and there was 75% penalty abatement and 100% interest abatement!
7. Wait some more for a letter from the Tax Review Board summarizing the decision from the hearing.
8. Wait some more again for an updated tax bill from the Dept. of Revenue.

All in all, this process took 5 months. Hope this helps!

[FKD19124]

The city is more concerned about bleeding its people dry then going after delinquent property taxes.

[PHL10]

Originally Posted by FKD19124

The city is more concerned about bleeding its people dry then going after delinquent property taxes.

They do seem to be completely on top of collecting wage taxes.

[Pennsport]

Originally Posted by PHL10

They do seem to be completely on top of collecting wage taxes.

Yeah, because people that owe wage tax obviously work and can usually pay at least a portion of their bills. Delinquent property taxes on the other hand are often attached to two kinds of individuals/organizations
1. Large development corporations who are frequently based outside the city and state
2. Unemployed and broke city residents who inherited the house from older relatives and have no means with which to pay

With the first example, you have an arduous and complicated legal mess to collect; and with the second, you can either evict and increase homelessness overnight by a huge percentage, or allow these individuals to not pay taxes (or usually support themselves in any manner) for the entirety of their lives.

The good news is that both of these scenarios are slowly resolving themselves due to the increase in value of Philadelphia property.

[KansastoSouthphilly]

Originally Posted by FKD19124

The city is more concerned about bleeding its people dry then going after delinquent property taxes.

Despite what you hear in the media the City is actually quite aggressive in collecting real estate taxes that are not in a payment plan. The City has 3 Sheriffs Sales every month. The City files nearly a thousand suits per month to collect real estate taxes. Many of the delinquent parcels you hear bout are actually in a payment plan.


However, for properties that are owner occupied (and owner is defined very loosely) the City offers a special payment plan where the owners will often only pay ~$25/mo or even "pay" zero dollars per month. It is extremely easy to qualify for this plan. The City is required to offer this payment plan because of an ordinance passed by City council. So the issue isn't so much that the City doesn't want to or can't collect delinquent real estate taxes, the issue is that City council wont let the City collect real estate taxes. Council's intentions are not necessarily nefarious. Many of them are concerned about their constituents losing their homes to Sheriff Sale. Whether this goes too far in balancing that concern is another question.

[KansastoSouthphilly]

Originally Posted by Pennsport

Yeah, because people that owe wage tax obviously work and can usually pay at least a portion of their bills. Delinquent property taxes on the other hand are often attached to two kinds of individuals/organizations
1. Large development corporations who are frequently based outside the city and state
2. Unemployed and broke city residents who inherited the house from older relatives and have no means with which to pay

With the first example, you have an arduous and complicated legal mess to collect; and with the second, you can either evict and increase homelessness overnight by a huge percentage, or allow these individuals to not pay taxes (or usually support themselves in any manner) for the entirety of their lives.

The good news is that both of these scenarios are slowly resolving themselves due to the increase in value of Philadelphia property.

Scenario one is actually extremely easy for the City to collect as long as someone will actually buy the property at a Sheriff Sale. Property owners are required to update the City of their mailing addresses and the City is required to provide notice at that address. There is no requirement that a property owner actually receive the notice of a Sheriff Sale. Most of these properties are not "large" corporations but are vacant lots owned by single owner LLCs. Some of them are based out of state some of them are not. It doesn't really matter. Many of these properties are vacant lots which will naturally receive less interest at a Sheriffs Sale.

[Sandr01]

Originally Posted by BK_PHL_DEL

I am going through this process myself - resolving my wage tax owed from 2013 & 2014. I simply did not know at the time about it since my employer is in Delaware. Scan everything to keep as documentation! Here's what I had to do:
All in all, this process took 5 months. Hope this helps!

Thank you so much for the detailed pointers, you're awesome . I don't live in Philly anymore so coming to the hearing would not be possible, and the principal amount they billed for 2014 and 2015 is wrong, so i'd have to get that corrected. I will email the contact you provided and see how this pans out, I was thinking to hire a CPA but since that's going to be expensive I'll keep that for last resort.

[Sandr01]

Originally Posted by FKD19124

The city is more concerned about bleeding its people dry then going after delinquent property taxes.

Mine is wage tax, I've moved away since 2015 and they've found me, with enough time to charge interest/penalty almost doubling what i owe too.