Zurik: Mayor says liens are mostly ‘fees’ and ‘penalties,’ tax attorney disagrees

Attorney suggests Cantrells should file and pay 2019 taxes on-time and make estimated advance payments for 2020 in order to get back on track

Zurik Cantrell Tax Folo

NEW ORLEANS, La. (WVUE) - When Mayor LaToya Cantrell went before cameras on Friday, Jan. 31, to explain federal tax liens placed on her and her husband’s Broadmoor home, she repeatedly tried to downplay the severity -- saying it was mostly interest and penalties.

The liens, first reported last week by FOX 8′s Lee Zurik, showed the Mayor and her husband, attorney Jason Cantrell, have liens over multiple tax years totaling $95,000.

Bill Neilson is a tax attorney and professor who previously worked for the Internal Revenue Service. He reviewed the Cantrell’s tax liens and personal financial disclosure statements, which are required reporting by the Louisiana Ethics Administration.

Last month, the IRS filed a $19,406 lien against the Cantrells. Neilson, by his estimation, said most of that lien is money the IRS says the Cantrells did not pay in taxes for the 2018 tax year.

“My guess of $19,000... Ninety percent of that is taxes [Income tax and FICA],” Neilson said.

Two other liens -- one for $31,940 filed in 2019 and another for $43,664 filed in 2018 -- have more penalties and interest associated with them, making the likely amount the couple owes is much higher than the lien total.

“I’d say 60-65% is tax... the rest is penalty and interest,” Neilson said.

Neilson said the income in question is likely related to the mayor’s husband’s income, tied to his law practice. One reason, Neilson said, is because Cantrell automatically gets taxes taken out of her paycheck from the city, which she referenced when she addressed reporters.

“I pay taxes, every time and in this role -- you know, I am an employee of the city -- so I get a W2 and a W2 tells you upfront how much taxes are being paid based on the income I have received. So this is not a situation where you don’t pay, or I have not paid," Cantrell said.

The Cantrells likely have a few months to negotiate a payment plan with the IRS, Neilson said. He said after that it’s likely the IRS will start garnishing the wages of the mayor or her husband. Neilson said the best thing the couple can do is to file this year’s taxes on time and make any payment applicable.

“Number one -- you got to get current. If you’re not current with the IRS they are not very happy,” he said. “First thing is preparing the ’19 return to get it paid in ’20 and start making ’20 estimated payments.

"Then they know you are back in the system and you can negotiate an installment agreement based on the numbers you have [for previous years],” he said.

Mayor Cantrell said she is working with a tax attorney to settle the liability.

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