Taxman to seller of luxury watches: Time’s up!
by AccountingWEB on
Christopher Wardle, 41, sells luxury timepieces costing more than $8,000 at his Bozeman Watch Company. But as far as the Internal Revenue Service is concerned…he’s run out of time.
Wardle owes more than a million dollars in taxes, according to U.S. District Court records, a debt which he said is not connected to his watch company. The IRS claims that:
- Wardle owes $1,010,267 in federal taxes between 2004 and 2006.
- He owes another $10,371 in delinquent income taxes from 2007, plus penalties, interest, and costs.
A few weeks ago, the federal government took Wardle to court in an attempt to force the sale of a home in Bloomfield Hills, Michigan, to help satisfy the debt. But there’s one rather large hitch. Wardle doesn’t own the home anymore. Needless to say the new owners are not amused.
Here’s what happened:
Wardle bought the house in 2004 for $840,000. Two years later, on September 15, 2006, he signed over the house to his wife as part of a divorce settlement. One month later, the IRS filed a lien against him for delinquent taxes amounting to $564,576.
"That's somewhat important,” he told reporters about the timing. “I didn't have any notice the lien was going to be filed. It wasn't like I was trying to dodge the lien [by signing the settlement]," he said.
In 2007, Wardle’s ex-wife sold the house to another couple for $900,000. Court records show she received $198,847 in cash from the sale, of which the government seized half. To collect the rest, the federal government is trying to get a judge to order that the house be sold and the net proceeds be used to help pay Wardle’s debt, even though the current owners had nothing to do with the tax lien.
The tax delinquency developed after he bought an employment firm in 2003. He didn’t realize at the time that the company had too much debt and too little cash.
"Unfortunately, I'm carrying the monkey of a past business issue on my back," Wardle told reporters. Even so, he disputes the amount the IRS says he owes. While the IRS set the debt at over a million, Wardle claims it is more like $200,000 to $500,000.
He’s made it clear to all parties that he doesn’t want the home’s new owners or his ex-wife to suffer because of his debt. But, he said, numerous requests to meet with the IRS to negotiate have gone unanswered.
"We'd like to enter into some sort of settlement agreement, some payment plan, and then as my other ventures grow to where the income increases, we can adjust the plan," he told The Detroit News. "But they won't meet with us. They claim the IRS is a friendlier IRS. But when nobody reaches out, there is no such thing in my world as a friendlier IRS."