Finance manager said not to include tax credits in reports

Local business owners say that decision adversely affected their firms and left them in the dark on how much they owed the city — and how much the city owed them.

In the August 2022 email, Asia Spratley, a program and operations manager in the finance department, provided guidance to another employee on how to find out how many taxpayer accounts “no longer have a balance due.”

“When running the detailed receivables report, please do not include credit balances,” Spratley wrote in the email.

Spratley, who worked on the “treasury side” of the finance department, told the Times-Dispatch that credit balances were omitted because the purpose of her reports was simply to determine who had outstanding balances.

It was the responsibility of the revenue team to determine whether “the (taxpayer) had a credit that would clear the balance,” Spratley said. So if tax overpayments went unnoticed or uncommunicated, it was the “revenue side” of the department that was to blame. 

“I want to clear my name,” she said, adding that she resigned from her position in August after “upper management (became) something I could not deal with.” 

Asked about Spratley’s email, city spokesperson Margaret Ekam said the directive was part of the city’s standard operating procedure.

Account reviews “focus on whether the business/taxpayer complies with state and local laws and payments have been made accordingly,” Ekam said. The reviews involve multiple different accounts for each taxpayer, Ekam explained — personal property tax, business tax and real estate tax balances are all assessed.

“From this, the finance department, in discussion with a business/taxpayer, will determine if a refund is due, taxes are owed, or if other adjustments are needed,” Ekam said. “(Spratley’s) instructions appear to follow the normal process to commence one of the data pulls needed to craft … payment letters.”

Payment letters advise taxpayers that they should contact the finance department to discuss the state of their accounts. But because the credit balances were not included in the reports, the subsequent payment letters and billing statements did not inform taxpayers they had overpaid and were owed money by the city, multiple business owners told The Times-Dispatch.

Jason Roop, the former editor of Style Weekly who runs the public relations and marketing firm Springstory, said he paid his 2022 business tax bill a day after the deadline. As a result, he was assessed a penalty and interest charge of $51.92 — a charge of which he was not made aware.

The next year, Roop accidentally overpaid his business tax bill without realizing it, he said. But instead of notifying him, the city applied $51.92 of the overpayment to his 2022 penalties and pocketed the rest.

Roop said he never received a payment letter. He would not have known about the overpayment if he had not gone into the finance department in person this summer — a year after the overpayment actually occurred.

In June, Roop noticed a delinquent balance listed on his business tax bill. That delinquent balance prompted him to drop by the finance department to “figure out what was going on.”

“They said I still owed on previous years,” Roop said. But they also told him — for the first time — that he had credit from the 2023 overpayment.

“The woman helping me explained that I had overpaid on taxes and they were holding the amount,” Roop recalled. “I said, ‘when was the city going to let me know?’”

Roop asked for a refund and eventually received it after two months of repeatedly contacting finance employees, he said.

And he’s not alone. Jeffrey Marks told The Times-Dispatch that he had to drive all the way from South Carolina to visit the finance department and settle his account.

Marks ran the Richmond-area company Promotional Considerations for over 40 years. One of his “biggest mistakes,” he said, was moving that company within Richmond’s city limits during his final five years of owning it.

Marks sold the business and moved out of state in 2020. But last December, “out of nowhere,” he received notice that the city was suing him for unpaid business taxes.

“No past due letter, no attempt to collect anything,” he said. “I was totally blindsided.”

Marks knew he had paid his taxes in full, so he reached out to the finance department multiple times for information. No one called him back.

“I was one of the people with voicemails that were never returned,” said Marks, referencing a recent audit that found the finance department ignored voicemails for six months and failed to answer 7,000 customer emails. Unable to get anyone on the phone, he drove the six hours from Charleston, South Carolina, to Richmond.

“I walked in with all my records,” he said. “All they could tell me is that my business license tax in 2019 was paid four days late.” But Marks had paid that tax in person in 2019 — and he paid his taxes in person again in 2020 — and no one told him about the late fee on either occasion.

“But wait, it gets better,” Marks said. While speaking with finance department employees, he realized he had paid for a full year’s worth of business taxes in 2020, despite selling the company in April. The city, as it turned out, owed him.

“I overpaid them for 10 months, and I was due a refund,” he said. And had he not made the 423-mile trip, he might never have known.

Marks said he finally got his refund check eight months after the debacle began. He blamed the current administration’s inaction for the “awful” experience.

“This is all under (Mayor Levar) Stoney,” he said. “That infuriates me. I’d like to ask him, ‘how would you feel if you were a taxpayer?’

“Stoney has basically said ‘things were a mess when I got here,’” Marks continued. “But I don’t think they were this big of a mess.”

Ekam noted that “most of the staff in the tax compliance/audit (unit) are no longer working with the finance department.” She did not respond when asked whether Spratley was among the employees who had left City Hall.

“The finance department is streamlining several processes, including addressing the lengthy review processes, training and retraining staff, and addressing past deficiencies and historical dysfunction,” Ekam said.

In March, Richmond’s City Council passed an ordinance requiring the finance department to notify taxpayers of credits on any of their tax accounts. But it is not clear how many notifications of credit or refund eligibility have been issued in the seven months since. Ekam said the finance department “does not track these records.”

Jim Osuna, Richmond’s inspector general, previously told members of the City Council that he had been advised by city attorneys to discontinue his investigation into the way the finance department had handled tax overpayments. A city attorney told Osuna the probe fell outside of his purview, he said.

Ekam denied the claim. She said an investigation into the issue had been completed and had cleared the city of wrongdoing, but she did not identify the agency that conducted that investigation.