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Tax actions filed against Tracey Edwards, but cases resolved

Tracey Edwards, a member of the Long Island

Tracey Edwards, a member of the Long Island Regional Economic Development Council, listens during a meeting in Melville, April 6, 2017. Credit: Ed Betz

The Internal Revenue Service filed a total of $173,507 in tax liens against Huntington Town supervisor candidate Tracey Edwards and her husband for unpaid federal income taxes between 2005 and 2012, public records from the Suffolk County Clerk’s office show.

According to records in the clerk’s office, the State Department of Taxation and Finance also filed $59,387 in judgments for unpaid income taxes against the couple between 1999 and 2010.

Edwards, a Huntington Town councilwoman, said the IRS and state actions against her and her husband, Walter T. Edwards, a Huntington Town groundskeeper, were errors that stemmed from identity theft.

Records in the clerk’s office show the couple “satisfied” the four federal liens between March 2016 and August as Edwards, a Democrat, launched her bid for supervisor.

Clerk’s records show the eight state income tax judgments were “wholly paid or satisfied” between 2000 and 2011.

Edwards said the couple never underpaid their federal or state taxes and that they settled all the liens without having to pay any back taxes, penalties or interest. Edwards said the state tax judgments also were caused by identity theft and tax fraud.

Edwards said she did not know how the identity theft scheme worked and said she never filed a police report about it.

“People used my identity and my husband’s to file tax returns, and also buy goods and services,” Edwards said in an interview.

She was referring to six liens and judgments, totaling $7,938, filed by private companies against the couple between 1982 and 1994, for items including a furnace, telephone bills and department store merchandise.

Records show all have been satisfied, except for a judgment filed in January 2015 for $105 owed to the Suffolk County Traffic and Parking Violations Agency.

Records of the tax liens and judgments originally were provided to Newsday by Mike Fricchione, a campaign aide to State Assemb. Chad Lupinacci, Edwards’ GOP opponent in the November election. Newsday then obtained the documents independently.

Edwards did not provide documentation to back up her assertion that the IRS and the state did not require payment to satisfy the liens and judgments.

An IRS spokeswoman and New York State Department of Taxation spokesman said they were prohibited by law from commenting on specific taxpayers.

In response to a Newsday request for records showing the IRS and the state had forgiven the liens, Edwards’ campaign provided an Oct. 12 letter to Edwards from her tax professional, Bryant Nikodem, vice president-financial counseling for Ayco, a Goldman Sachs company with offices nationwide.

Nikodem confirmed only that the firm on April 14, 2014 attempted to file Edwards’ federal return, but received a rejection notice saying a return already had been filed using Tracey Edwards’ Social Security number. Ayco provided the IRS with the paper return along with an IRS “Identity Theft Affidavit,” Nikodem said.

The IRS “confirmed receipt” of the form and provided Edwards with an “Identity Protection” personal identification number, Nikodem said.

Edwards cited the IRS’ assignment of the PIN as evidence that the agency agreed with the identity fraud claim.

Records in the Suffolk Clerk’s office show the IRS filed three liens between June 2010 and July 2013 against the Edwards for unpaid taxes for 2005 through 2008, and 2010 through 2012.

In 2010, the IRS also filed a lien against Walter Edwards for $24,757.27 for unpaid taxes for 2009. Tracey Edwards’ campaign manager, Luis Montes, said the couple always had filed jointly, and had no explanation for why the 2009 lien would have been filed against Walter Edwards as an individual.

The IRS certificates of release of the tax liens, filed by the agency between March 3, 2016 and Aug. 1, say the Edwards “satisfied the taxes” listed on the form.

The state “satisfaction of judgment” forms say the warrants were “wholly paid or satisfied.”

While the State Taxation and Finance Department would not speak specifically about the Edwards case, agency spokesman James Gazzale said that generally, if a tax warrant is resolved through payment, it is listed as “satisfied.” Warrants dismissed due to agency error are listed as “vacated,” Gazzale said. He did not elaborate.

There were no vacated warrants for the Edwards on file with the Suffolk Clerk’s office, where tax-lien related records are filed.

Edwards, 55, of Dix Hills, first was elected to the Huntington Town Board in 2013 after running unsuccessfully in 2001 and 2003.

She earns $76,841 a year as a councilwoman, and worked for 37 years for Verizon, retiring in September 2016 as regional president for operations and construction. Walter Edwards made $114,558 in 2016, according to town payroll records.

Edwards said she first became aware of the tax liens in 2013, when she and her husband tried unsuccessfully to file their taxes electronically.

To back up her assertion that she didn’t underpay her federal taxes, Edwards showed Newsday IRS forms saying she had overpaid her taxes in 2005 and 2006, and that the taxes had been applied to prior year tax bills, although she declined to release redacted copies.

“It takes years to clear it,” she said of the federal liens. “It took longer than it should have because in the middle I had breast cancer.” She said she received her diagnosis in December 2015.

Edwards addressed the liens in a campaign mailer earlier this month, in which she said she had been a victim of identity theft. The mailer includes a copy of the IRS form notifying her of the PIN.

“It happened to her . . . A victim of identity theft and tax fraud. Her tax dollars stolen. The IRS mistakenly demanding payments from her. A bureaucratic nightmare,” the mailer says.

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