IRS Seizes Chabad Yeshiva, Synagogue

The IRS has seized Chabad’s Worcester, Massachusetts yeshiva day school and synagogue for unpaid taxes. Chabad owes Uncle Sam $435,235.31 in unpaid taxes dating back to 2004. Almost all of those unpaid taxes are payroll taxes.

Rabbi Hershel Fogelman, right; Rabbi Mendel Fogelman, left

IRS Seizes Chabad Yeshiva, Synagogue
Shmarya Rosenberg • FailedMessiah.com

The IRS has seized 22 Newton Avenue in Worcester, Massachusetts, the building that houses Chabad’s Yeshiva Achei Tmimim synagogue and its Yeshiva Academy Hebrew day school. Chabad owes $435,235.31 in unpaid federal taxes dating back to 2004. Almost all of those unpaid taxes are payroll taxes, the Worcester Telegram reported.

Over the past decade, the IRS tried to get Chabad to pay up, but to no avail.

A public auction of the building is now reportedly scheduled for January 4. Only sealed bids will be accepted, with bids starting at $472,000.

Despite the upcoming IRS auction, things reportedly still appear normal at 22 Newton Avenue.

Both the school and synagogue continue to operate because the IRS – so far – has not evicted Chabad. But if the property sells next month, that eviction is a definite possibility.

Chabad of Worcester has been led for decades by Rabbi Hershel Fogelman, who is now 90-years old and rehabbing from an illness in a local Jewish nursing home. His son Mendel has handled much of the day-to-day operations for many years.

Besides the IRS bill, Chabad of Worcester also owes money to the City of Worcester and to private creditors.

The City of Worcester is owed $12,399 in unpaid water and sewer charges for 22 Newton Avenue and for 24 Creswell Street, Rabbi Hershel Fogelman's residence.

Acme Pre-Pak Corporation is owed $10,461.

As recently as 2010, records show that Chabad owed more than $31,400 to National Grid.

$25,000 is owed on a 2001 mortgage on 22 Newton Avenue taken out with Commerce Bank & Trust.

Last year, Chabad lost another property when Commerce Bank & Trust foreclosed on the yeshiva dormitory building located at 9 Midland Street.

The dilapidated property was purchased by a longtime members of the Chabad community for $61,000 who are now renovating the property.

“We bought it for ourselves [not to let the yeshiva use it again]. We wanted someone in the community to keep it, rather than let someone else take it. We just felt like, someone Jewish should own it,” she told the Telegram, noting that she and her husband intend to move into the home when renovations are completed next year.

Comments

[sam]

Perhaps someone from Yeshiva's congregation — or someone within the larger Jewish community in Worcester — will step up and buy the school and synagogue's property when it goes on the auction block next month.

Amen!

http://www.telegram.com/article/20121223/COLUMN73/112239950

[Mendel Baumgartner]

This is not right. If a religious intitution is considered tax exempt it shoul be exemptof ALL taxes. This is blatant discrimination.

[sam]

... wait a minute - maybe Triguboff can come to the rescue!

[Runner1983]

Mendel, the article states that most of the unpaid taxes are payroll taxes, which are not tax exempt. In addition, the article also states the City of Worcester is owed $12,399 in unpaid water and sewer charges, Acme Pre-Pak Corporation is owed $10,461, more than $31,400 is owed to National Grid, and $25,000 is owed on a 2001 mortgage.

Seems to me that that the people running this Yeshiva didn't know what they were doing, and the board was completely inept.

[Expatriate Owl]

Mendel Baumgartner says: " If a religious intitution is considered tax exempt it shoul be exemptof ALL taxes. This is blatant discrimination."

No, Mendel!!

The religious institution is exempt from Income taxes (and, perhaps, real property taxes).

But the people it employs ARE NOT exempt from the income tax, and are not exempt from Social Security or Medicare taxes.

And if (or rather, when) the employer, religious institution or otherwise, withholds income tax (Federal and state), social security, and other PAYROLL TAXES from the paychecks of the employees, then the employer is liable to turn those withholdings over to the IRS and the State taxation authorities.

[And if the employer does not satisfy the liability for withheld taxes, the individuals who should have made sure that the taxes were remitted to the government can be personally liable.

https://www.ustaxcourt.gov/InOpHistoric/Be2eler.TCM.WPD.pdf

https://www.ustaxcourt.gov/InOpHistoric/MASON.TC.WPD.pdf ]

[Rocky]

Mendel: Payroll taxes pay for the Social Security and Medicare benefits of elderly Jews as well as elderly Christians. Even rabbis get Medicare benefits. Personally, I am in favor of all religious institutions paying more taxes, including taxes on their investment income. Too many frumme get away with not even paying property taxes on their personal residences.

[In the Know]

There are many in and close to Chabad for whom that sum is pocket change. Sorry to say, but that yeshiva will be here long after this blog is gone.

[Yosef ben Matitya]

they are possibly happy, they sold the yeshiva at 5 times it's worth.

[Seymour]

Mendel

Payroll taxes are collected from the worker's .

In a way this is stealing

Stop crying wolf eveytime s yid gets the news it's getting old

[dd]

yay! the best news of the year .

happy new year !

[dd]

to "In the Know ',

do not visit this blog if u r so bitter . go to a pedophile blog ,instead .
you'll be happier . this awsome blog {failed messiah} is not meant for chabad ppl . so, do not visit it and do not write anything in it . i'll see u soon at chabad lubavitch ottisville yeshiva .

[Hat]

The day school system is in big trouble. When the economy declines again and job losses stack up, the day school system will face enormous stress.

[Zalman Alpert]

OK the real issue is the state of Oethodoxy in Worcester. There are few such Jews left. Most of the Orthodox Jews and shuls are gone. The Lubavitch Yeshiva has about 25-35 students thats it. So they have had seriosu issues all around.
The school should eb bailed out by Central Lubavitch and new younger leadership installed. The amount stated is not a lot of money to The Krinsky led organization. Without it W stands to lose its base for Jewish education.This was a mosad created by the previous Rebbe and should not be allowed to close.
I strongly urge Krinsky to act !

[WoolSilkCotton, rock star and sports superstar]

Zalman, Chabad centers that can't stand on their own two feet don't necessarily get bailed out by Big Chabad from Brooklyn.

If they're doing poorly, it needs to deal with it like any business:

Slim down, cut the payroll, hire administrators who know how to run a business, and not just family members with hats and beards, figure out why you're not appealing to your customer base anymore, and if there are no more customers, consider relocating.

Even relying on the largesse of one wealthy donor is not a smart strategy. If that guy disappears or his money dries up, your shul collapses. Always smarter to have a broad base of smaller donors.

[mel thejew]

CHABAD; THE LICE OF JUDAISM and spreading constantly and for non messianic jews we have no peace.have watched this spread since the early 1980's. it is gathering a pace.

[SkepticalYid]

Posted by: Mendel Baumgartner | December 25, 2012 at 08:02 AM

No, it would be discrimination if every so-called religious institution was exempt from all the taxes everyone else pays.

[Office of the Chief Rabbi]

The water and sewer charges seem to have been "adjusted" by the City.

The last payment made was June 2005.

The property is valued at just under $2M

http://www.worcesterma.gov/e-services/search-public-records/real-estate-tax-cml/cml-details?field1=09d1ad0c-4e52-11e2-92c0-001a64c29c6c

[ah-pee-chorus]

if only chabad hadnt wasted millions trying to get the convicted fraudster SMR a few less years in prison.

[SkepticalYid]

Chabad owed the city money as well. They also have a long history of violating town ordnances.

http://bit.ly/V3Ixml

[under duress]

I stayed with a Chabad family there many years ago (not leadership) - super nice people. I hope they are well and are able to weather this.

[Simple Jew]

B"H

Shmarya

Why did you post this?

Are you trying to help them find a donor to IY"H bail them out?

Maybe in the Xmas spirit you are changing your ways.

[Zalman Alpert]

I thought the issue for Chabad was Jewish education and identity not the profitability.
Clearly Central Lubavitch ought to pay the debts and replace the Fogelman's with new leadership.
Chabad stands for Jewish eductaion, just because you can not create bucks shoudl not mean the end of Day school education in Worcester.
There are any # of dynamic young Shluchim who would do a great job here and there are amny Chaabd donors who could be steered to clear up things here.

[Nigritude Ultramarine]

@Rocky "Personally, I am in favor of all religious institutions paying more taxes ..."

I think there should be no tax exemption for religious institutions. Let them "tithe" to the government 10% of their gross income -- just to make it fair -- to see how real people live. Oh, and no deductions and no "parsonage" for rabbis, priests, or ministers.