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Team 4: IRS Hits UPMC With Large Tax Liens

POSTED: 5:00 pm EDT September 5, 2007
UPDATED: 6:20 pm EDT September 5, 2007

Team 4 has learned the Internal Revenue Service is going after UPMC, saying the health care giant failed to pay nearly $4 million in tax liens.

The accusation comes just days after UPMC announced record profits.

So, how does a hospital chain with nearly $7 billion in revenues and $600 million in profits get hit with a tax lien?

UPMC said it's no deadbeat. It claims to have paid all its taxes. In fact, UPMC blames the IRS for a bookkeeping error that led to the lien.

Typically, the IRS issues at least two written warnings before it files a tax lien.

"It's generally a lengthy process," said certified accountant James Fellin. "This isn't something that happens in a period of days or weeks. It's generally months."

The IRS issued one lien for $2.4 million against UPMC and another for $1.4 million was against University of Pittsburgh physicians, which is a division of UPMC.

Total taxes owed would have been $3.8 million.

The liens were for quarterly withholding taxes that all employers, even nonprofits like UPMC, are required to file.

But a UPMC spokesman told Team 4 "UPMC has paid all taxes owed to the IRS in a timely manner. Because of a change in the way that UPMC reports to the agency for its various and complex entities, some deposits were made to incorrect accounts. The IRS credited the accounts with these deposits. Subsequently, despite UPMC's concerted efforts, the IRS has failed to transfer these funds to the correct accounts. We are in active discussions with the agency and hope to resolve this bookkeeping matter soon."

If the IRS files a tax lien against you, it can ruin your credit and keep you from selling your house. But you are not a multibillion-dollar hospital chain and experts said even several million dollars in liens should have little effect on UPMC's bottom line.


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