The IRS, claiming it has exhausted all administrative remedies to collect overdue taxes from a Yorktown Heights couple, is demanding the sale of one of their properties to satisfy the obligation.
U.S. Attorney Damian Williams sued Phillip Liu and Ellen Chan-Liu on July 7 in U.S. District Court, White Plains, to recover $70,295 for the U.S. Treasury.
Liu, the former chief financial officer of Guild Concepts Ltd., a White Plains marketing company, has served time in federal prison for embezzling and misappropriating funds from an employee pension plan. And over the past 15 years the IRS has assessed him for millions of dollars in taxes and penalties, most of which appear to have been paid off.
The current case concerns unpaid taxes on income in 2009, the year he was released from prison. Liu, according to the complaint, underreported his income by $88,159. In 2012, the IRS assessed $38,948 in taxes and penalties.
The tax bite has grown to more than $70,295, but despite demands by the IRS, Liu and Chan-Liu, his wife, have allegedly neglected or refused to pay off the debt.
The feds’ proposed remedy is to compel the sale of a 3-bedroom condominium in Elmhurst, Queens that the couple bought in 1999 and rent to a son. The property is worth about $425,000, according to the complaint, and has a mortgage balance of $106,404.
The government is asking the court to declare that Liu’s interest in the property is subject to a valid federal tax lien, direct any current occupant to leave the property, order the condo to be sold by the U.S. Marshal, and apply Liu’s share of the proceeds to the tax debt.
Attempts to find contract information for the couple, to ask for their side of the story, failed.
Liu’s tax troubles appear to stem from the Guild Concepts embezzlement.
From 1998 through 2003, Liu didn’t deposit more than $351,000 in contributions to the pension plan, according to court records, and in 2003 he made unauthorized withdrawals of more than $996,000. In all, he deprived 52 employees of nearly $1.35 million in pension benefits.
Liu had emigrated as a child from Hong Kong, where the family had maintained a middle-class lifestyle in China, according to a 2005 sentencing memo by his attorney. But in the U.S. his parents struggled, and the family atmosphere was poisonous and abusive.
Liu diverted pension funds to cover Guild Concepts payroll taxes and operating costs, according to his lawyer. But he also gambled to escape stress. From 2002 through 2004, for example, he lost $454,105 gambling at Mohegan sun Casino in Uncasville, Connecticut.
In 2004, he pleaded guilty to theft from the pension plan and to issuing fraudulent quarterly reports. In 2005 he was sentenced to 57 months in prison.
In 2007, the IRS assessed Liu for more than $1.3 million for failure to collect employment taxes. By January 2020, the debt had been reduced to about $436,000.
In 2019, he was assessed more than $2.1 million for employee benefit plan excise taxes. Last year, the IRS released that tax lien.
