City penalizes Richmond restaurant $20,000, co-owner claims they were kept in the dark

Richmond

RICHMOND, Va. (WRIC) — Imagine having to pay $20,000 to the government, and no one told you. That’s what the co-owner at Brenner Pass restaurant in Scott’s Addition said happened to him just months ago.

Now, he’s hoping for a solution and that no one else falls through the cracks.

“It’s been exhausting,” said Brad Hemp, co-owner of the Brenner Pass restaurant.

He said he accidentally missed a meals tax payment in 2018, and then in 2019 the Richmond Finance Department billed him for it — but, they never told him.

“After they created that tax bill, they started taking the normal monthly meals tax payment we make is a restaurant—any restaurant makes—and applied it first to this tax bill,” Hemp said. “And this sort of rolled-on month after month, and it created under payments for each of those months of meals taxes, again I wasn’t informed they were doing this, I wasn’t informed about penalties that resulted from this.”

Wednesday night, a city official disputed the claim that Brenner Pass was not notified.

“Finance has documentation of sending a statutory assessment to the establishment due to lack of monthly filing in December, 2019,” the official said.

Hemp responded via text that he “would love to see such documentation as I’ve never received any.”

Hemp found out about the meals tax mishap hen he applied for Richmond’s meals tax amnesty program, made to give relief for restaurateurs in the pandemic, he was told he owed $20,483.91.

To avoid having to dig deeper in his wallet, he paid it.

“If it’s found that I was not liable to pay those penalties because of the department of finance‘s actions, I would expect they would be able to refund the money or credit it back to me,” Hemp said.

However, he said if they don’t, he will look at litigation.

A city spokesperson said “timely and accurate payment of taxes is the taxpayer’s responsibility, not the city’s.”

“The city is seeking to implement an account management solution through the use of technology. Although notifications are not required by law, they can be beneficial,” the spokesperson added.

City officials also pointed to a 1982 opinion from Virginia’s Attorney General, noting that “failure to timely pay a tax because they did not receive a bill is not considered grounds for a waiver of penalty and interest because the taxpayer knows it is subject to a tax, and bears the burden of investigating the amount and paying such tax.”

8News talked with a Henrico finance official today about their protocol in similar situations.

“We try to communicate when they miss a payment or a filing. we’ve utilized our business inspectors in finance to reach out to delinquents,” said  Leo Marsh, Revenue Division Director for Henrico County.

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