COVENTRY – Former clients of the now-defunct payroll services company Aeden Waterford have a new champion in their corner: Senator Charles Schumer.
Yesterday, the New York Democrat sent a letter to IRS Commissioner Doug Shulman urging the federal tax agency to come to the aid of businesses who were allegedly defrauded by the payroll company, which was owned and operated by William Stiles from 2002 until August of this year.
“The IRS should be doing everything in its legal power to reduce their burdens and alleviate their payments,” Schumer said, not treating them as “criminals.”
It wasn’t until more than a month after Stiles informed his clients he was closing that those businesses learned they owed in some cases thousands of dollars in federal employment taxes to the IRS. It was money they had already paid once – to Aeden Waterford.
In a letter to his former clients – which included more than 100 Southern Tier businesses, including a number of companies in Greene, where Aeden Waterford maintained a satellite office – Stiles admitted his wrong-doing. The details of the letters were included in an article which appeared in the Oct. 25 edition of The Evening Sun, along with interviews of several Greene area business owners who had used the service and one of Stiles’ former employees.
The matter was brought to the senator’s attention, and in mid-November a handful of Greene business owners met with representatives from the legislator’s Binghamton office. Information gathered at that meeting provided the basis of Schumer’s letter to Commissioner Shulman.
In the letter, Schumer urged the agency head to take several steps to assist Aeden Waterford’s former clients, namely to reduce the payments owed by each business; waive interest and penalties; create “lenient” payment plans; and provide expert assistance. He also entreated the IRS to assure businesses they would not be subjected to future audits.
Gary Kurz of The Silo Restaurant in Coventry was one of the business owners who reached out to Schumer’s office. The small business owner, who found himself owing some $24,000 in federal withholding taxes, was one of the hardest hit by Stiles’ fraudulent activities in Chenango County.
He said he and Aeden Waterford clients were “blindsided” by the unexpected tax bills they received. He has already paid down roughly half of his tax debt, which he admits was less than the $40,000 he initially feared he owed.
“It’s still a killer,” he said, explaining that the money he is diverting to pay those taxes - for a second time - would otherwise be going to keep other bills current or “build a cushion for a bad weekend.”
Filing the necessary paperwork with the IRS, and responding to the requests for information the agency has requested pursuant to their investigation of Stiles, has also cost him additional time and money he says.
The questions Kurz says he keeps asking himself is how, with all of the layers of government regulation, could something like this happen.
“How does a company that deals with many millions of dollars in payrolls ... not have a license or bond or oversight from some federal agency?” he questioned, recalling assurance he received from Aeden Waterford when he first signed as a client that the company was indeed a Professional Employer Organization, and required to do so according to New York State law.
Remembering a time, before he used an outside payroll company, when he received a visit from IRS agents because he was a few weeks late with his federal withholding taxes, Kurz also wonders how Aeden Waterford escaped the agency’s attention for so long when so many of their clients were assessed penalties and interest for past quarters.
“How does that not raise a flag to the IRS?” he asked.