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County Working to Collect Tax Debts from Shuttered Restaurants

by ARLnow.com — March 1, 2013 at 11:35 am 1,494 33 Comments

The former Eleventh Street Lounge in ClarendonClosed restaurants dominate the list of meals tax delinquencies in Arlington County. The latest list, from December, includes only 3 currently-open restaurants among the 23 that owe the county more than $10,000.

(Meals tax delinquencies are often accrued when restaurants collect a required tax on food from customers but then fail to pay the collected funds to Arlington County.)

The open restaurants on the list include Extra Virgin (4053 Campbell Avenue) in Shirlington, which has been gradually paying off its debt. The restaurant now owes the country $38,402.12, down from $54,568.51 one year prior. Also on the list is Monuments Restaurant (2480 S. Glebe Road), a restaurant in the Comfort Inn hotel on Glebe Road near I-395. Monuments owes $27,722.09 according to the list, which is published by the county treasurer’s office. Village Bistro (1723 Wilson Blvd), located between Rosslyn and Courthouse, is listed as owing $19,614.13.

Among closed restaurants, the former Bebo Trattoria owes $173,716.28, up from $167,366.79 last year due to interest. Bebo owner Roberto Donna is currently the chef at Al Dente restaurant in D.C., and is planning to helm a second restaurant in the District soon. By court order, he is paying the county $500 per month.

The second-highest meals tax debt to the county is $121,126.93, which is owed by the former Eleventh Street Lounge in Clarendon.

Christopher J. Sadowski, Arlington’s Deputy Treasurer for Litigation, says the county is trying to collect its debts, even from the owners of closed restaurants. He said the Treasurer’s Office has an “increased focus on and aggressiveness in collecting delinquent meals taxes.”

“Clearly, older debts are harder to collect, and the likelihood that assets and responsible parties can be located decreases the longer a business has been closed,” Sadowski said. “The Treasurer, however, does not give up on or forget about any delinquent account (though we do allocate our resources and efforts as appropriate). As evidence of that, we are now receiving payments from some long-closed restaurants near the top of the list for the first time in years due to recent collection efforts by this Office.”

“Now, do I think that despite our very best efforts, some of those delinquent accounts and dollars will go uncollected?” he continued. “In reality and unfortunately, yes.”

Sadowski said the county is also proactively trying to prevent other restaurants from falling behind on their meals tax payments.

“We do not allow restaurants to fall behind, or at least not very far behind, in remitting their meals tax payments,” he said.

The delinquency list (above $10,000), after the jump.

R D TRATTORIA INC (BEBO TRATTORIA) $173,716.28
RTM INVESTMENT GROUP (LP ELEVENTH STREET) $121,126.93
ARLINGTON CATERING CO LLC (ARLINGTON CATERING CO LLC) $82,699.47
MURKY ARLINGTON LLC (MURKY COFFEE) $64,604.27
TF 629 CORPORATION (WALL STREET DELI) $47,401.31
WALL STREET DELI SYSTEMS INC#606 (WALL STREET DELI #629) $42,589.36
JULI LIEBERMAN FINE CATERING SERVICES INC (RESTAURANT VERO) $39,831.22
EXTRA VIRGIN OF SHIRLINGTON LLC (EXTRA VIRGIN) $38,402.12
ANA RAMIREZ (LAS DELICIAS RESTAURANT) $29,707.19
MONUMENTS FOOD SERVICE LLC (MONUMENTS REST/COMFORT INN) $27,722.09
LUKLYN RESTAURANTS INC (CHARLEYHOUSE GRILL) $27,626.34
SAIGONIQUE INC (SAIGONIQUE RESTAURANT) $21,806.97
RK AND AG INC (ARMAND’S PIZZA) $20,667.49
CASA D’PASTA INC (CASA D’PASTA INC) $20,661.29
ENJERA ERITREAN RESTAURANT LLC (ENJERA RESTAURANT) $20,128.46
VILLAGE BISTRO INC (VILLAGE BISTRO) $19,614.13
YEE HWA INC (BISTRO BISTRO) $19,450.39
1615 RESTAURANT CORP (1615 RESTAURANT CORP) $14,485.28
MEMPHIS BAR-B-Q COMPANY INC (THE MEMPHIS BAR-B-Q COMPANY INC) $13,964.98
LA CASONA RESTAURANT INC (LA CABANA) $13,819.70
SNOZA SHAKEN LLC (SNOZA SHAKEN) $11,151.43
ALEX CALEB LLC (CAFE PARISIEN) $10,489.72
LUZMA CORP (TUTTO ITALIANO) $10,041.60

  • South Awwlington

    Seize whatever they own. They collected the money in the name of the tax…so what did they do with it?

    • guest

      In most cases, they probably used the tax money they collected as a sort of short-term financing to prop up their failing restaurants, hoping the business would turn around and they would be able to pay everything they owe. In essence, they made the County (and us taxpayers) involuntary partners in their failing businesses.

      • Old Fart

        Gee, where have we seen parallels in the business world before? You know, cases where they fail and we pay.

        No penalty for guessing.

        • drax

          Too bistro to fail!

      • SomeGuy

        Very well stated!

    • http://www.arlnow.com/ ARLnow.com

      As stated in a previous article (http://www.arlnow.com/2012/12/03/exclusive-oleary-seeking-power-to-shut-down-deadbeat-restaurants/) many restaurants rent their space and rent much of their furnishings and equipment. So there’s not much to seize.

      • South Awwlington

        Roberto Donna has plenty of personal assets…and he has a habit of not paying taxes.

    • Id

      The trick is the restaurant equipment and space is leased. The owners are operating as a corporate entity. So, when the County goes after them, what are they in essence going after?

      • Id

        “are” leased.

  • Cletus Van Damme

    Gotta close that $22 million gap…

    • Dumbdowner

      AND pay for the new aquatic center and streetcar!!

  • Mike Honcho

    Arlington needs to sick their best librarian on these places

  • SomeGuy

    Frank O’Leary doesn’t forget. And Frank O’Leary always gets his man, woman, vehicle, entrepreneur, or restaurateur.

  • Arlingtoon

    I say good for the County for doing this. It’s nothing but theft, pure and simple. They collected the taxes from their patrons and then pocketed the dough.
    Too bad Roberto Donna’s mansion in McLean is in his wife’s name. $500.00/month to repay the theft of $173,716.00 is absurd.

    • guest

      I agree that it is theft, and I was happy to see that none of the restaurants I frequest are on this list. I don’t think I would eat at a restaurant that was stealing from taxpayers and the county schools, parks, etc.

    • jackson

      At that rate, it will take him just shy of 29 years to pay it all (assuming there’s no interest or late penalties).

  • James Moron

    The county should require Donna to serve private functions to pay off the debt. Plenty of people would pay $500+ to have him cater in a home. $500/month is just plain offensive.

  • flux

    Charley HORSE Grill

  • Alex

    As a business owner I think it’s immoral that these businesses pocketed tax money from patrons rather than paying the county what it was owed. I will not patronize any business that is knowingly ripping off Arlington in order to pay their bills. If you can’t stay solvent, then you shouldn’t be in business. Period.

  • N Herndon St Guy

    I’m surprised the county can’t come up with a more effective means to encourage payback. Perhaps forcing these restaurants to post a big (3′ x 4′) sign on the front of their establishment noting that they currently owe $K in back-taxes. I think this would encourage patrons to take their business elsewhere (and thus serve as a deterrent to falling behind).

    • Deadite

      The Scarlet Sign. Sounds good in theory, but if you drive away a lot of the restaurant’s business it will have no hope at all of ever paying back those taxes.

  • Douglas Parker

    I went to Extra Virgin with several neighbors last fall. It was such a dissapointment. We asked the waiter if they made their pasta in house, to which he replied ‘Some are and some aren’t’. Which I know now is really code for ‘none of them are but since I told you some are you’ve gained confidence in our product, but in acutality none are’.
    Long story short, it overpriced and UNDERgood. We all ordered pasta. It sure as hell wasn’t fresh made. Hope they go under. I should have followed my instinct. I was a bit suspicious when the place was dead on a Friday night.
    There’s nothing I hate more than paying top dollar for diner grade quality. It was robbery.

  • SomeGuy

    Anyone know why the county doesn’t shut down these businesses when they reach a certain delinquency threshold? I’m surprised a company/restaurant can even get a chance to rack up a $100k+ delinquency (except for maybe a few exceptional high-revenue businesses which may be able to do that in a short time).

    Why doesn’t the county collect on a more frequent basis, if necessary, and shut down businesses when they reach, say, a $30k delinquency? Or a delinquency based on a percentage of last year’s revenue? Otherwise, it appears these scoundrels just keep extending the lives of their failing businesses using tax-collection “financing” from their patrons.

    • http://twitter.com/paulwilsonarch PaulWilsonArchitect

      Because a business that’s a going concern has a better chance of paying its debts, so it’s a balancing act. When it’s shut down, the county would have to get in line with other creditors, including the IRS. Usually it’s a sign of a restaurant in extremis when they start stiffing the tax man. They may also be behind on employee withholding payments to the feds as well–and that adds up really quickly.

  • Deadite

    Sad to see Village Bistro made the list.

  • mike scott

    “Bebo Trattoria owes $173,716.28, up from $167,366.79 last year due to
    interest…By court order, he is paying the county $500 per month.”

    If you’re keeping track- the interest is $6,349.49 a year, but the court has only ordered has to pay $6,000 a year. That doesn’t make a whole lot of sense.

    • other side of the river

      That’s also 29 years worth of payments at $500/month to get to $174K.

  • Anonymous Arlington commenter

    I am righteously indignant! The nerve of these people! I would never do anything like this or even touch them with a ten foot pole! Put em in jail and throw away the key!
    Oh, and also, how dare Arlington raise taxes! The government is too big and bloated as it is!!

  • AL

    Boycott ALL of these restaurants.

  • fedworker

    The amount of delinquent taxes owed would certainly be able to pay for a couple of streetcars

  • fedworker

    The amount of delinquent taxes owed could certainly pay for a few streetcars

  • realreformist

    Talk about pouring salt on their wounds. These businesses were forced to shut down and now the gov is trying to collect taxes from them? What a bunch of blood suckers.

  • Dumbdowner

    Has no one here ever been late on taxes or other bills? Has no one here ever run a business on the margin of profitability? Do people understand the ebb and flow of cash with “it’s the economy,stupid” fluctuations? Without sin?? Stone away…

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