By DAVID A. MANN
Haven House Services Inc.’s Williams Emergency Shelter in Jeffersonville will be put up for sale by the U.S. Internal Revenue Service following nonpayment of federal payroll taxes by Haven House.
The shelter, 1727 Green St., will be sold at auction next month. Haven House Executive Director Barbara Anderson said the homeless shelter would continue to operate through August — both prior to the sale and during a 160-day redemption period that follows. If the shelter’s tax debts aren’t paid by that time, it will be closed.
We’ve done all we can,” Anderson said in a telephone interview Monday.
She was not sure exactly how much was owed because the interest on the back tax debt compounds daily, but estimated about $300,000. Haven House’s tax problems have been known since 2007, after it went about three years without paying its payroll taxes. It initially owed about $400,000, but sold some transitional housing units, along Colonial Park Drive in Jeffersonville, for about $185,000.
However, interest charges have brought the total back up.
According to the organization’s 2006 tax form 990, the latest available online, it received about $450,889 in total contributions that year. Its expenses totaled $537,899, creating a deficit of $87,010. Anderson salary is listed at $48,000 for that year. However, she has said that she’s gone months without pay in the recent past. The Evening News has requested a copy of the organization’s most recent tax filings, but has not received it. Anderson said it’s still legally a 501(c)3 nonprofit.
If an entity doesn’t pay its taxes, or make arrangements to settle debt, the IRS can seize and sell its property.
IRS spokesperson Jodie Reynolds was reached for comment, but said federal law prohibits the agency from commenting on a specific entity’s tax situation. She did, however, share information from IRS.gov, which relates to the tax-sale procedure.
Essentially, once the IRS seizes a property, it will give a public notice of a pending sale, which will take place 10 a.m. March 9 at the Clark County Government Building, 501 E. Court Ave. Notice was given over the weekend in The Evening News via a legal advertisement.
Before the sale, it computes a minimum bid price, in this case $7,807.66, which is typically 80 percent or more of the forced sale value of the property.
The IRS uses the proceeds of the sale to pay off expenses of the levy and sale and any remaining amount goes to pay the tax bill. If the proceeds of the sale are less than the total of the tax bill, the person or entity still has to pay the unpaid tax. If they’re more, Haven House could ask for a refund of the surplus.
Once the sale takes place, Haven House has 180 days to redeem the property by raising the entire tax bill.
Haven House was founded in 1986 as part of the former Hoosier Valley Economic Opportunity Corp., which restructured about 13 years ago and is now known as Community Action of Southern Indiana. The original Haven House was heavily damaged by fire in January 1986 and later that year, Anderson incorporated the Haven House name and began offering homeless and transitional-housing services independently.
At this point, Anderson said, an organization would have to save Haven House by paying off its tax debt.
You can’t get blood out of a turnip,” she said, “the only thing we have is our assets.”
The agency relies on private donations and charges its 65 or so tenants $5 per day to stay there. However, she said, “most of the time we don’t get enough to pay the utility bills.”
It’s behind on paying its state filing fees, listed as “administratively dissolved” on the Indiana Secretary of State’s Web site. And, Anderson said, it’s been 21⁄2 months since its employees have been paid.
According to the Indiana Department of Labor, employees are supposed to be paid every 10 business days. Those who are not have a right to file a wage claim against the agency not paying them.
In the past, the organization had used grant dollars to stay afloat. Anderson said a $300,000 grant was used to purchase and make the building habitable. It also received $40,000 in emergency shelter grant funds and an $186,000 per year supportive housing grant.
It began having trouble paying its payroll taxes in 2003, Anderson said.
“We always tried to make the payments, but it was never enough,” she said, adding that several state shelters have closed over the past few years.
The grant money dried up at that point. Anderson has since approached local governments asking for money and she’s offered to resign in exchange for a bailout.
“After August, our agency has done all we can,” Anderson said. “We either have a shelter, we have tents or we have people in the park. They’ve been through us with a fine-tooth comb.
“I can’t make something out of nothing.”
Jeffersonville Mayor Tom Galligan noted Monday night that Anderson has been before the city council several times and the council has expressed no interests in paying toward the shelter’s operation.
“I hope the sale brings the money,” Galligan added, saying that he wouldn’t want to see Anderson personally “on the hook” for back taxes. He wouldn’t commit on whether the city would ever be interested in taking over the shelter, saying that he’d have to look into it more in depth.
Councilman Mike Smith, whose district contains the shelter, said he had not heard about the sale. However, he added, “any homeless shelter is not just a city issue, it’s a county issue.”
