TAX NEWS - June 2010

New York Tax: New York State Hits Grandpa For $2 Mil In Bogus Taxes

Government Has Pursued 70-Year-Old For 15 Years, But His Financial Gurus Say Back Taxes On Pay He Never Received.

The government wants him to pay -- on money he says he never received. On Monday night a Brooklyn man said the state tax department is ruining his life.

The 70-year-old grandfather of 10 has a colossal tax problem and it's getting bigger.

"The New York State tax authority has made my life a total miserable disaster for all these years," Joseph Villano said.

It started in Brooklyn, where Villano's company installed 11 elevators at a government building in the early 1990s.

The trouble is he said the $400,000 he stood to collect from the job evaporated when the general contractor overseeing the job ran into trouble -- its assets seized by the government.

But that hasn't stopped New York State from claiming that he still owes hundreds of thousands in back taxes -- and he said they've hounded him for it for 15 years.

"The New York State Department of Taxation and Finance has been relentless. They've garnished his wages, levied his bank account and seized his car," attorney tax practitioner Bradley Dorin said.

And just Monday afternoon there was another shocker.

"I got this notice in the mail, only the total now is at $2.174 million. So the number gets bigger every time I get this," Villano said.

"This is an outrageous abuse," tax practitioner David Selig said.

Villano's tax team said the state has already gotten its money and shouldn't be paid twice.

"I would like to find a way to have this to come to an equitable conclusion so I can live the remainder of my life without looking over my shoulder every day to see if there is going to be a tax revenue guy walking up my driveway," Villano said.

Villano's advisers are proposing to New York State what is known as an offer in compromise. They're hoping to settle the case for $1 and bring his 15-year nightmare to an end.

CBS 2 HD reached out to the Manhattan District Attorney's Office, which has yet to provide answers to our questions. The New York State Department of Taxation and Finance would only provide a list of the amounts it says Villano owes.