Federal authorities last week froze several accounts owned by the Rotterdam Emergency Medical Services and placed liens on its property after rejecting a debt payment plan offered by the nonprofit ambulance company.
The move by the Internal Revenue Service means that most of Rotterdam’s $10,000-per-month contract with REMS will now go directly to the federal government to pay off the company’s outstanding debt of roughly $315,000. Joe Vanderwerker, the chairman of the ambulance company’s Board of Directors, said the freezing of assets places a financial hardship on REMS, but shouldn’t hinder its ongoing operation.
“We’re still getting enough money in to make our payroll,” he said Monday.
Vanderwerker said the ambulance company was working with the IRS in the hope of waiving some of the late fees and penalties assessed by the IRS. When these expenses are subtracted, he said REMS owes the federal government about $188,000.
The IRS imposed substantial tax liens against the ambulance company in November 2007 and March 2008. In both instances, the liens were for unpaid payroll taxes.
Initially, the ambulance company offered to pay the IRS $4,500 per month and a lump sum of $25,000 at the end of the year to help pay down its debts within three years. But Vanderwerker said the IRS insists on levying a payment of $9,000 per month, which would seriously affect REMS’ financial stability.
“There was nothing we could do about it,” he said of the frozen accounts. “[The IRS] did this while we were writing a letter of appeal for their denial of our payment plan proposal.”
Rotterdam and Princetown both contract with REMS for ambulance service. Rotterdam signed a contract with the company in November.
Princetown officials were scheduled to ratify a new contract with REMS last month, which would have paid the company $32,000 per year. But at the last minute, members of the Town Board tabled the contract approval, citing the company’s ongoing negotiations with the IRS.
Members of the Rotterdam Town Board are expected to discuss REMS during their meeting Wednesday. Deputy Supervisor Robert Godlewski said the board wants an assurance from REMS that the company will remain solvent and that the town’s contribution won’t merely be used to pay off its debt to the IRS.
“I don’t think that’s how the taxpayers wanted that money to be used,” he said following the board’s agenda meeting Monday.
Supervisor Frank Del Gallo said the town still supports the ambulance company, but he said it appears as though the IRS seems to be working against them.
“We’re on their side,” he said. “It’s just that the federal government isn’t.”
Vanderwerker remains optimistic that an arrangement can be worked out with the IRS that would be suitable for all the involved parties. He said staffers with U.S. Rep. Paul Tonko, D-Amsterdam, are attempting to broker a deal that would bring everything to a resolution by the end of the week.
He said the debt to the IRS is the last big hurdle REMS needs to clear on the way to solvency. He acknowledges the latest move by the IRS complicates the financial outlook for the company, but insists it won’t stop it from working through the debt.
“We’re working aggressively to get this thing settled,” he said.
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