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Innkeeping (on the business side) is not for the Faint of Heart

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Samster

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This is a vent which I hope I can have a good laugh at someday. I'm always reminded of the expression of Joey Bloggs' "Innkeeping is not for the faint of heart" when I run into idiocracy with local bureaucrats....
I closed my inn earlier this year and have been dealing with the final details since then. I spent this afternoon talking to the local and State revenue departments. I fared better with the State folks - helpful, polite, and handled my ongoing issue finally. I hope! (Did I mention that they wanted to charge me a penalty on zero sales tax dollars collected?) I did have to go the the local branch in person since the phone was busy every time I called. Good grief...
I did NOT have a good experience at the local revenue department. Both clerks were very rude and weren't very helpful. Even faced with a photocopy of paperwork submitted to them last year, they swore it was never completed and/or filed by me. The clerk wanted me to hand copy this document on a blank form (3 pages with detailed financial info) rather than her using their very visible photocopier. WTF? I did manage to convince her that it was definitely redundant effort on my part to do that and she photocopied it. Jeez... Meanwhile, the person who collects lodging tax apparently not only doesn't talk to the person who tracks occupation tax but they can't look at each other's notes in the computer? Huh? Nothing can be done either on the phone or online either. I now have more forms to fill out which I need to bring back to them in order for the business to be closed officially.
Some examples of the conversation....
"Can you at least enter a note into the computer on my account stating the date the business closed per the owner (me) who has appeared in person before you today and the final paperwork is pending receipt?" "No, I can't do that."
"Have you ever thought of creating some kind of brochure or instructions for small businesses to navigate all of this since you're saying that I should have contacted you to ask for paperwork that I had no way of knowing that you were supposed to send me that I never received?" After the deer in the headlights look, she answered, "No, there are no instructions, but you can call us and ask us what you should have received from us?" Double HUH??
Now, I'm sure that this doesn't happen everywhere but being forewarned is being forearmed.
I think I'll have a glass of wine now....
Oh, rats...I still have to fill out that paperwork that I should have divined that I should have received and needed to complete...........
 

Alibi Ike

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Along the same lines- we bought an operating inn and filed all the appropriate paperwork to get properly licensed and get an EIN. We got Workers Comp set up, the proper employment tax forms, hired a company to process payroll and file all of the appropriate forms and pay all the appropriate taxes at the appropriate time.
One year into the business, we received one of those very stern letters from the IRS stating they would be seizing our assets, freezing our accounts, shutting us down, etc, etc, etc because we were operating illegally under two separate business names. (i.e.- cooking the books) Like you, WTF!? Turns out the last owners never 'closed' their business so everything was being misfiled under their old business name. All of the taxes we paid, misfiled. All of the forms we sent, misfiled. Some of it filed under our EIN, some filed under the old one.
Makes you wonder. They absolutely require that EIN on everything. You must fill it in to send in anything. And yet, they inconsistently used the name of the business to do the filing. And because the former owners didn't care, they never fixed the problem. We had to untertake all of the expense of getting it all straightened out.
 

JBloggs

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See...just goes to show you can never escape innkeeping...never
 

Samster

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Along the same lines- we bought an operating inn and filed all the appropriate paperwork to get properly licensed and get an EIN. We got Workers Comp set up, the proper employment tax forms, hired a company to process payroll and file all of the appropriate forms and pay all the appropriate taxes at the appropriate time.
One year into the business, we received one of those very stern letters from the IRS stating they would be seizing our assets, freezing our accounts, shutting us down, etc, etc, etc because we were operating illegally under two separate business names. (i.e.- cooking the books) Like you, WTF!? Turns out the last owners never 'closed' their business so everything was being misfiled under their old business name. All of the taxes we paid, misfiled. All of the forms we sent, misfiled. Some of it filed under our EIN, some filed under the old one.
Makes you wonder. They absolutely require that EIN on everything. You must fill it in to send in anything. And yet, they inconsistently used the name of the business to do the filing. And because the former owners didn't care, they never fixed the problem. We had to untertake all of the expense of getting it all straightened out..
OK...I'm going to open a bottle of wine now & maybe you should too! Arrrrrrrrrrrrrrrrrrgh!
Oh, if someone had assumed my business they could have gone along filing away. They may or may not have caught up with them that they needed to apply for their own business license. Trust me....it's a mess down there. :-(
 

JBloggs

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When we bought this inn I was penalized for not sending in tax statements for the months we did not own the inn.
Make sense? Nope. We bought it, and the po's had closed it between moving out and us moving in and for those months (again ASPIRINGS BEWARNED, MAKE THE PO'S CONTINUE TO OPERATE - CONTINUE TO BE LISTED - CONTINUE TO RECEIVE GUESTS - PUT THIS IN YOUR CONTRACT!!!
I WAS SUPPOSED TO submit all the forms, for those months, since our name was on it for that year, even though we bought it and closed March. I didn't even own it yet! They finally backed down, but it was one of those "Whoever owned it for the year" things.
 

bbinnsitters

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Along the same lines- we bought an operating inn and filed all the appropriate paperwork to get properly licensed and get an EIN. We got Workers Comp set up, the proper employment tax forms, hired a company to process payroll and file all of the appropriate forms and pay all the appropriate taxes at the appropriate time.
One year into the business, we received one of those very stern letters from the IRS stating they would be seizing our assets, freezing our accounts, shutting us down, etc, etc, etc because we were operating illegally under two separate business names. (i.e.- cooking the books) Like you, WTF!? Turns out the last owners never 'closed' their business so everything was being misfiled under their old business name. All of the taxes we paid, misfiled. All of the forms we sent, misfiled. Some of it filed under our EIN, some filed under the old one.
Makes you wonder. They absolutely require that EIN on everything. You must fill it in to send in anything. And yet, they inconsistently used the name of the business to do the filing. And because the former owners didn't care, they never fixed the problem. We had to untertake all of the expense of getting it all straightened out..
Word of caution to all aspirings - if you are buying an existing B&B - did the owners actually close their business? Sounds like a pain for the PO's if they do and a pain for the new owners if they didn't! I feel for each of you Samster and Alibi!
 

Samster

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When we bought this inn I was penalized for not sending in tax statements for the months we did not own the inn.
Make sense? Nope. We bought it, and the po's had closed it between moving out and us moving in and for those months (again ASPIRINGS BEWARNED, MAKE THE PO'S CONTINUE TO OPERATE - CONTINUE TO BE LISTED - CONTINUE TO RECEIVE GUESTS - PUT THIS IN YOUR CONTRACT!!!
I WAS SUPPOSED TO submit all the forms, for those months, since our name was on it for that year, even though we bought it and closed March. I didn't even own it yet! They finally backed down, but it was one of those "Whoever owned it for the year" things..
Idiocracy abounds everywhere it seems. Sorry to hear that......... ACK!
 

Alibi Ike

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When we bought this inn I was penalized for not sending in tax statements for the months we did not own the inn.
Make sense? Nope. We bought it, and the po's had closed it between moving out and us moving in and for those months (again ASPIRINGS BEWARNED, MAKE THE PO'S CONTINUE TO OPERATE - CONTINUE TO BE LISTED - CONTINUE TO RECEIVE GUESTS - PUT THIS IN YOUR CONTRACT!!!
I WAS SUPPOSED TO submit all the forms, for those months, since our name was on it for that year, even though we bought it and closed March. I didn't even own it yet! They finally backed down, but it was one of those "Whoever owned it for the year" things..
Another 'along the same lines' story- (background first- around here we pay a business property tax) So, another innkeeper never received the business property tax forms because the town was sending them to the former owners at the inn address. New owners forwarded the mail along to the former owners. Former owners were apparently just tossing them. Being newbies, they didn't know there was a business propety tax form or a tax that needed to be paid. (Aspiring aside- if you move to a new town, county, state, country to run your business, assume you know absolutely nothing about anything because it's all different than what you really do know.)
Fast forward 5 years when the innkeeper goes to renew her license and is told she owes $5000 in back taxes on business property she doesn't even own because the former owners took it all with them. Still not sure how that one worked out, I'll have to ask.
 

Samster

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When we bought this inn I was penalized for not sending in tax statements for the months we did not own the inn.
Make sense? Nope. We bought it, and the po's had closed it between moving out and us moving in and for those months (again ASPIRINGS BEWARNED, MAKE THE PO'S CONTINUE TO OPERATE - CONTINUE TO BE LISTED - CONTINUE TO RECEIVE GUESTS - PUT THIS IN YOUR CONTRACT!!!
I WAS SUPPOSED TO submit all the forms, for those months, since our name was on it for that year, even though we bought it and closed March. I didn't even own it yet! They finally backed down, but it was one of those "Whoever owned it for the year" things..
Another 'along the same lines' story- (background first- around here we pay a business property tax) So, another innkeeper never received the business property tax forms because the town was sending them to the former owners at the inn address. New owners forwarded the mail along to the former owners. Former owners were apparently just tossing them. Being newbies, they didn't know there was a business propety tax form or a tax that needed to be paid. (Aspiring aside- if you move to a new town, county, state, country to run your business, assume you know absolutely nothing about anything because it's all different than what you really do know.)
Fast forward 5 years when the innkeeper goes to renew her license and is told she owes $5000 in back taxes on business property she doesn't even own because the former owners took it all with them. Still not sure how that one worked out, I'll have to ask.
.
YIKERS!

Along those lines here...which is why you can see my aggravation with this whole process - When I first opened and got my Certificate of Occupancy, then my Health Department Permit and took those to get my business license, I ASKED repeatedly what other taxes, fees, etc. would be payable every year. I was told at that time that I would only need to renew my business license. They forgot to mention that part of that is the big occupation tax return form. Yeah, a small detail. No mention was made either of filing quarterly or any time more than once a year just for the license. They have no brochure, instruction book or anything for small business owners here to help you with this process of determining what you have to pay for every year.
Add to that because the city revenue department doesn't really talk to the property tax department here, there is also a business personal property tax which is assessed every year and was never mentioned. They assessed my business at the same rate as the larger and much, much larger B&B here.
So, even if you ask, continue to ask, ask again and again, you many never get the answer until a form shows up in the mail. OR, you never get a form (like your innkeeper friend and myself).
Moral of the story: Keep good records, copy everything that you send to these agencies (including the check), if hand delivered request a receipt, and if there are large payments or penalties involved send everything certified/return receipt required. Be ready to hear that even if you did all these things, they may still deny things were received...which is what I'm dealing with.
But I hope to have it resolved soon....
 

Samster

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The end of the story....
I had the supervisor help me today and she was so helpful and nice that I am writing a letter to her supervisor at the city.
Turns out that they converted to a new computer software system about a year ago and my business "fell through the cracks" and there was a software glitch. I got everything straightened out with no penalties because I had a COPY of the form that they said that they never received.
Of course I owed them more money, but it was not excessive.
And, I made a suggestion for new business owners that I hope the supervisor will try to have implemented. Just a simple checklist for someone so they know what they need to expect to happen. We'll see if that happens....
 

Alibi Ike

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The end of the story....
I had the supervisor help me today and she was so helpful and nice that I am writing a letter to her supervisor at the city.
Turns out that they converted to a new computer software system about a year ago and my business "fell through the cracks" and there was a software glitch. I got everything straightened out with no penalties because I had a COPY of the form that they said that they never received.
Of course I owed them more money, but it was not excessive.
And, I made a suggestion for new business owners that I hope the supervisor will try to have implemented. Just a simple checklist for someone so they know what they need to expect to happen. We'll see if that happens.....
Samster said:
And, I made a suggestion for new business owners that I hope the supervisor will try to have implemented. Just a simple checklist for someone so they know what they need to expect to happen. We'll see if that happens....
I know this has been pretty much a hate-hate relationship up until this point, so take this and toss it if you want- write up the checklist for them. Bulleted list, let them fill in the form names, etc, but hand it to the supervisor who helped you and say, 'This is what I mean. If I had had this, your office would not have had so many headaches with my business.'
 

bbinnsitters

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The end of the story....
I had the supervisor help me today and she was so helpful and nice that I am writing a letter to her supervisor at the city.
Turns out that they converted to a new computer software system about a year ago and my business "fell through the cracks" and there was a software glitch. I got everything straightened out with no penalties because I had a COPY of the form that they said that they never received.
Of course I owed them more money, but it was not excessive.
And, I made a suggestion for new business owners that I hope the supervisor will try to have implemented. Just a simple checklist for someone so they know what they need to expect to happen. We'll see if that happens.....
Yeah Samster - way to hang in there and get it figured out - you knew you were right and had done everything you were supposed to! They screwed up (and maybe you shouldn't owe them that money!!)
 

One Day

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After an IRS audit last year....I incorporated this past January
Same business name...........same principle owner, now president.
IRS can't fight their way out of a paper bag.....they sure can tell me how much $ they think I am cheating them.
Everything else....State, Workers comp, unemployment. No problem
 

Samster

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The end of the story....
I had the supervisor help me today and she was so helpful and nice that I am writing a letter to her supervisor at the city.
Turns out that they converted to a new computer software system about a year ago and my business "fell through the cracks" and there was a software glitch. I got everything straightened out with no penalties because I had a COPY of the form that they said that they never received.
Of course I owed them more money, but it was not excessive.
And, I made a suggestion for new business owners that I hope the supervisor will try to have implemented. Just a simple checklist for someone so they know what they need to expect to happen. We'll see if that happens.....
Samster said:
And, I made a suggestion for new business owners that I hope the supervisor will try to have implemented. Just a simple checklist for someone so they know what they need to expect to happen. We'll see if that happens....
I know this has been pretty much a hate-hate relationship up until this point, so take this and toss it if you want- write up the checklist for them. Bulleted list, let them fill in the form names, etc, but hand it to the supervisor who helped you and say, 'This is what I mean. If I had had this, your office would not have had so many headaches with my business.'
.
Oh no, THEIR office had NO HEADACHES from me or my business. They never sent me any paperwork with this issue, I actually had to go to them. She told me that I was the only hotel/motel type business that filed my lodging tax on time every month. They let some other things related to occupation tax fall through the cracks on their end which was why I was in there and this supervisor re-affirmed that the City had messed up when we chatted. She had no explanation other than they had installed a new system. The headaches were all one way and were mine!
This supervisor I love...I actually know her through some other connections. It is the lack of customer service and crabby attitude of others in that office that anoys me. They just don't want to help you out and go into immediate blame denial which was totally not the point at all. I just wanted to take care of business. I told this gal that she was the nicest municipal employee that I've encountered since I've lived here (this is multiple departments, and because of multiple hats that I've worn) and I was serious.
She is the first person that I've talked to that genuinely gets that their job is to provide service to citizens and also that we pay their salaries. :)
It's encounters like this that always remind me of how important it is to keep the customer in mind....
 

Samster

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The end of the story....
I had the supervisor help me today and she was so helpful and nice that I am writing a letter to her supervisor at the city.
Turns out that they converted to a new computer software system about a year ago and my business "fell through the cracks" and there was a software glitch. I got everything straightened out with no penalties because I had a COPY of the form that they said that they never received.
Of course I owed them more money, but it was not excessive.
And, I made a suggestion for new business owners that I hope the supervisor will try to have implemented. Just a simple checklist for someone so they know what they need to expect to happen. We'll see if that happens.....
Yeah Samster - way to hang in there and get it figured out - you knew you were right and had done everything you were supposed to! They screwed up (and maybe you shouldn't owe them that money!!)
.
Nope, I definitely owed them the Business Occupation Tax and it's all settled now. (Which is different than collecting the pass-through occupancy or hotel/motel tax.) The form I received in 2009 showed a HUGE credit due to them converting to a new system, which was the beginning of the problem. If you have a credit and you receive no forms, most people would assume that everything is straight. It was only because I went to them to make sure that everything was definitely closed out by the end of this year, that this all came to light. Unfortunately, they have not come into the 21st Century on some things.
I posted this mostly to make others aware that you really have to keep good records and keep things documented properly. And, to vent my frustration on how very unhelpful the first two people were.
Whew! It's all finished now........
 
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