Publisher of Afro hit with tax lien IRS says that taxes for withholding weren't turned in.

August 29, 1991|By Michelle Singletary | Michelle Singletary,Evening Sun Staff

The IRS has filed a $245,000 tax lien against John J. Oliver in a move that will hold the publisher of the Afro-American newspaper accountable for employee-withholding taxes that weren't turned over to the government.

The Afro, which employs about 100 people, publishes weekly newspapers in Baltimore, Washington and Richmond, as well as the nationally distributed Dawn magazine.

This is the fourth time in the last four years the IRS has taken steps to get back taxes owed by the company.

It is possible the Afro has been paying the IRS in installments, but there is no available public record of such payments.

Oliver could not be reached for comment.

The latest lien, filed in Baltimore Circuit Court Aug. 16, holds Oliver, as an officer of the company, personally responsible for employee-withholding taxes.

Not included in the most recent lien is more than $77,000 plus interest and penalties the government claims is owed for Social Security and unemployment taxes.

Liens such as those filed against Oliver are intended to make corporate officers responsible for the past-due taxes in the event the company closes down or files for bankruptcy, according to Domenic LaPonzina, public affairs officer of the Baltimore District of the IRS.

"The government can hold officers responsible because they run the company and they make decisions on what bills are paid. Management has a commitment to satisfy tax liabilities," LaPonzina said.

Although LaPonzina could not by law comment specifically on the Afro case, he did explain at what point such liens are filed.

When a company has incurred a sizable tax liability, the government has the option to file a lien against officers of the company. However, such liens cover employee-withholding taxes only.

Companies collect withholding taxes from the employees' pay and are bound by law to turn it over to the government. It is illegal to use that money for any other purpose.

"One of the first warning signs that things are going down in a company is when tax liens are filed," LaPonzina said.

The fact that the privately owned Afro was having financial problems surfaced in 1989. Circulation was down, advertising was scarce and the company faced $900,000 in debts.

Oliver sought relief from creditors. In the fall of 1989, creditors agreed to take 25 cents on the dollar, reducing the company's debt by three-fourths.

Since then, local and national creditors of the Afro have said the ++ company has kept to its payout plan.

Recently, Oliver said the company's finances had improved and circulation for the three papers was running about 75,000, up from a low of 20,000 in 1989.

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