BENZ RULES
Big wheel is N.Y.’s worst tax deadbeat at $22M
HE DRIVES a new $100,000 Mercedes-Benz, lives in a $1.8 million home and has been honored for his philanthropic efforts in the Jewish community.
He was also named the state’s top tax deadbeat last month.
Allen Rosenberg, of Atlantic Beach, L.I., owes New York state $22 million in unpaid sales, employment and payroll taxes as of April 9, according to the state’s Department of Taxation and Finance and court records.
The 54-year-old real estate developer has appeared on the list of the 250 worst tax offenders in the state since 2012.
Over that time, Rosenberg and a team of investors have been involved in numerous real estate deals involving the purchase and sale of multimilliondollar properties throughout the city, according to a bankruptcy court filing against him.
State tax officials say they have done everything possible to recoup the back taxes. Rosenberg currently has 18 open warrants, including two for unpaid personal income tax — listed with his wife Mia Rosenberg — six for withholding tax, and 10 for sales tax.
But critics of the system say that Rosenberg has been able to duck tax collectors for years by creating new limited liability companies in different names for all his real estate deals.
There are more than 40 related companies tied to Rosenberg — many of those listed as variations of Alrose, a combination of his first and last name, according to a bankruptcy trustee legal filing against him.
Rosenberg is not alone — some of the worst offenders are fixtures on the state’s list as they continuously evade paying.
“Many people are on it for many years,” said Karen Tenenbaum, an attorney who represents several people on the list.
All told, New York’s top tax evaders owe the state half a billion dollars, records show. State tax officials have the ability to put warrants on properties, issue bank levies and suspend driver licenses. The Tax Department has averaged 247,500 warrants, 103,000 income executions and more than 5,000 license suspension notices each year since fiscal year 2013-2014.
But the state rarely hits top scofflaws with criminal charges.That’s because prosecutors must prove beyond a reasonable doubt that a scofflaw purposely tried to evade the law. Simply failing to pay taxes is almost never enough to generate criminal charges.
“We arrest taxpayers who have committed tax crimes,” said James Gazzale, a spokesman for the Tax Department. “Tax debts are civil debts that are collected in accordance with the state’s debt collection laws.”
He declined to say how many arrests the department had made over the past five years.
Rosenberg, who has never been criminally charged, declined to comment about his outstanding tax debt.
“I’d love to be able to talk to you about it,” he said, adding, “we’ve been in negotiations for a while. We are handling it.”
He referred calls to his lawyer Heidi Sorvino, who refused comment.
The state declined to discuss how Rosenberg piled up his massive debt, saying the information is protected under the law.
Tax experts say the state is likely never going to get all the money owed by Rosenberg and other tax scofflaws.
Scofflaws can argue they will never be able to pay the full bill and can apply for an “offer in compromise,” where the state forgives a portion of the debt in exchange for partial payment.
State Sen. Brad Hoylman (DManhattan) plans to introduce legislation on Wednesday to “shine a light on the murky world” of the state’s limited liability companies. The bill would require LLCs to publicly disclose their owners.
“There’s a major blind spot when it comes to LLCs in the state of New York,” Hoylman said. “That’s why they are vehicles for nefarious activities.”