QUEENSBURY — The Internal Revenue Service has filed a $1.3 million lien against Saratoga & North Creek Railway for unpaid federal income taxes for 2013-15, the biggest debt among a number of tax problems the shuttered company has locally and federally.
The lien was filed in the Warren County clerk’s office last month, alleging SNCR and its parent company Iowa Pacific Holdings LLC owe $1,357,341 in federal income taxes to the IRS. SNCR shut its local operations early last month amid mounting financial issues.
The company also has not paid its property taxes in Essex, Warren and Saratoga counties for 2017 or 2018, according to officials in all three counties. It owes $80,299 in Essex County, an estimated $20,000 in Warren County and $2,177 in Saratoga County.
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The IRS lien is for the tax years of 2013, 2014 and 2015. It was unclear what the status of the company’s tax payments is for 2016 and 2017.
A spokesman for the IRS said the agency could not comment further on the lien, or say whether there were any other tax liens against Iowa Pacific for its other railroads around the country.
The company is also delinquent on property taxes in the region as well. While it contract to use the rail line owned by Warren County between North Creek and Hadley, it owns the Sanford Lake rail line, which begins in Warren County where the county’s line ends north of North Creek, and runs north through Minerva to the former titanium mines in Newcomb.
That lien would have to be satisfied if SNCR is able to sell the line, as Iowa Pacific President Ed Ellis has said he wants to do. During an acrimonious public meeting in late March, he announced he was stopping tourist train service on the rail line, and wanted $5 million for the Sanford Lake line, which his company purchased in 2011 for an unspecified price.
Warren County Treasurer Michael Swan said the local counties will fall behind the IRS in terms of getting their debts satisfied if property is sold. The counties could foreclose on the properties for county property tax debts, but the IRS would take their cut before the county tax bills are satisfied.
“They are first in line,” he said.
The property taxes that are owed in Saratoga County are for railroad property in Hadley that is owned by Warren County, but for which SNCR has been paying taxes until 2017. Swan said Warren County will pay the tax bill to avoid foreclosure there.
Counties typically foreclose on properties when taxes are not paid for three years.
Based on the tax amounts the IRS claims in the liens, it appears the company’s income had dropped each of the three years for which the lien was filed, as the tax bill declined from $582,993 in 2013 to $328,319 in 2015.
Neither Ellis nor his company’s corporate counsel, David Michaud, responded to emails and a call for comment Friday.
Matt Simpson, Horicon town supervisor and chairman of Warren County Board of Supervisors Public Works Committee, said it was his understanding that Iowa Pacific was awaiting word on $35 million in additional financing it was seeking to help with operations.