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IRS puts Squirrel Hill home on block to recoup owed taxes |

IRS puts Squirrel Hill home on block to recoup owed taxes

| Wednesday, June 8, 2011 12:00 p.m

Richard McCoy and his wife have spent afternoons the past couple weeks on the front porch of their nearly century-old Squirrel Hill home.

The weather has been nice, but the McCoys aren’t outside by choice. The IRS changed the locks to the 3,747-square-foot English cottage-style property on Albemarle Avenue and plans to auction it next week.

Minimum bid for the June 15 public sale: $300,000.

McCoy, a former Pittsburgh plastics broker, pleaded guilty in 2001 to filing false tax returns, spent 18 months in an Ohio prison and paid a $10,000 fine. He paid his debt for the criminal act of hiding more than $900,000 in income in the Cayman Islands. But McCoy, 68, owes the IRS more than $4 million in unpaid taxes, interest and penalties that built up over 10 years, the agency says.

“Why wait so long?” McCoy said this week while pecking on a laptop computer in the shade of his porch.

An IRS spokesman declined to comment, citing law that prevents disclosure of tax information.

In October 2008, almost five years to the day after McCoy left prison, the government surprised McCoy and his wife, Joyce, by asking a federal judge in Pittsburgh to order the sale of their home to recover some of the unpaid taxes, according to court records.

The McCoys thought the government wouldn’t seize their home, McCoy said, because his wife was not implicated in the tax evasion and owns half the house. But Richard and Joyce McCoy filed their 1998 tax return jointly, giving the IRS a legal opening to seize assets to recover what the agency says is more than $378,000 owed for that year, according to U.S. District Court filings.

“That one year she was on the form, so she’s responsible,” McCoy said. “They’re using that to come after the house.”

It’s essential that the government prosecute people who don’t pay their fair share of taxes, said Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based organization that advocates against wasteful government spending.

“To make our tax system go, people need to feel that everyone is paying their fair share,” Ellis said. “When people find out about people avoiding taxes, they feel like suckers, and that encourages scofflaws.”

McCoy declined to comment about circumstances that led to his pleading guilty to filing false tax returns for 1993 and 1994. He said he was “responsible” for the crime and that his “intentions, at least initially, were not to avoid taxes.”

According to a 2001 Tribune-Review report, the IRS began investigating McCoy after a Cayman Islands bank owner, John Mathewson, was arrested in 1996. Mathewson owned Guardian Bank & Trust on Grand Cayman, where McCoy banked from 1991 to 1995.

Mathewson, who died in November 2009, agreed to cooperate with investigators and turned over bank records. Those records showed McCoy deposited checks payable to his business, Polymer Industries, at Guardian Bank & Trust to make it appear the company had no income. McCoy then transferred money from his Guardian account to another offshore account in the Netherlands. The Netherlands bank would make bogus loans to Polymer Industries, authorities said at the time.

Last month, agents from the U.S. Marshals Service knocked on the McCoys’ door.

“The marshals showed up and gave us an hour to get out,” McCoy said. The agents changed the locks on the home, and the McCoys have stayed with friends since.

The couple’s personal property remains in the house and is not part of the auction, said Bob Digregorio, a property appraisal and liquidation specialist for the IRS.

McCoy said he has tried to work out a deal with the IRS since 2009 that would allow him and his wife to keep the house they’ve owned since 1982 and pay what they owe for the 1998 tax year. He said on Monday that he came up with a cash offer he hopes will stop the auction and is awaiting the agency’s response.

Allegheny County property tax records valued the McCoys’ home at $353,900 in 2010.

In a court filing in the IRS’ civil foreclosure case, McCoy states he obtained a 2009 appraisal that valued the home at $650,000.

The buyer of a 2,800-square-foot home up the block from the McCoys’ paid $710,000 last month, a real estate agent said.

Additional Information:

Public auction

What: The IRS will auction a 3,747-square-foot, single-family home in Squirrel Hill with four bedrooms, 3 1/2 bathrooms and a garage.

When: Noon, June 15. An open house starts at 10 a.m.

Where: 5421 Albemarle Ave.

Details: A $60,000 certified or cashier’s check is required to place a bid. The minimum bid is $300,000.

Categories: News
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