Back Taxes Force Shut Down of Dardanelle Restaurant
By:
Updated: July 12, 2012
Arkansas tax law says if you buy a business, the seller has to have all of his or her taxes paid up---or you can end up out of business quick.
That's exactly what happened to James and Carrie McHam, of Russellville.
"We were hoping to make a living, you know, support our kids," said James McHam. He and his wife of almost 10 years spent their life savings to buy a small restaurant.
The couple got a $55,000 15-year loan to buy the place in Dardanelle on May 11. Comes July 6, a state tax agent shows up and tells them they have to close their doors immediately since the previous owner hasn't paid last year's sales tax.
The previous owner, Leon Lane Sr., would not speak to KARK News about this story.
Now the Country Kitchen has a padlock on it's front door and the McHam's have no recourse. They cannot afford an attorney.
This happens to other folks who buy a business without doing their due diligence to make sure all taxes are paid up first, said John Theis, Deputy Commissioner with the Arkansas Department of Finance and Administration.
"Buyer, do your homework," he warns.
Even though the McHam's have all the legal paperwork proving they bought the restaurant and paid their first installment, for now they are stuck.
"I don't understand how this could happen but look out," McHam said of the situation.
That's exactly what happened to James and Carrie McHam, of Russellville.
"We were hoping to make a living, you know, support our kids," said James McHam. He and his wife of almost 10 years spent their life savings to buy a small restaurant.
The couple got a $55,000 15-year loan to buy the place in Dardanelle on May 11. Comes July 6, a state tax agent shows up and tells them they have to close their doors immediately since the previous owner hasn't paid last year's sales tax.
The previous owner, Leon Lane Sr., would not speak to KARK News about this story.
Now the Country Kitchen has a padlock on it's front door and the McHam's have no recourse. They cannot afford an attorney.
This happens to other folks who buy a business without doing their due diligence to make sure all taxes are paid up first, said John Theis, Deputy Commissioner with the Arkansas Department of Finance and Administration.
"Buyer, do your homework," he warns.
Even though the McHam's have all the legal paperwork proving they bought the restaurant and paid their first installment, for now they are stuck.
"I don't understand how this could happen but look out," McHam said of the situation.
Comments
The McHam's just moved out of my house and took my stove and refrigerator with them. They did however leave behind feces smeared on the wall and drug paraphernalia. I actually let them move in because I felt sorry for them after hearing this story. I wrongfully assumed they would respect me and attempt to be good renters due to the fact that I am a soldier stationed overseas.
Larry S.
October 24, 2012 at 6:46 pm
The Lanes seem to have our dardanelle police on their side. I actually saw certain police( who I will not name at this time) loading up boxes of paper work out of the Country Kitchen this afternoon. So whose to say they were'nt taking the Mchams personal paperwork. The facts are the Mchams were trying to make an honest living for their family of 8 and were following the contract to the letter and were takin advantage of with no remorse what so ever!!! Not even allowed their personal belongings back!! What kind of people are the Lanes? Not trust worthy apparantly. If they wanted their side told they should have accepted the interview.!!!! Please support the Mchams and let people like that Know they cant bully their weight over honest, good people!!!
jackie j.
July 15, 2012 at 11:15 pm
How can someone contribute to the McHam's lawyer fund? This just isn't right!
Chuck C.
July 13, 2012 at 3:01 pm
Hopefully this issue will be settled soon and everyone will be satisfied with the outcome.
Leon J.
July 12, 2012 at 12:39 pm
Actually, I believe Anna A is correct Leon J.
The state's response was VERY telling. If Channel 4 had contacted the state about this and there were no taxes owed, the state would have responded "we have no idea what you are talking about". Instead, their director advised owners purchasing businesses to do their research before buying. This indicates that SOMETHING was there that they should have researched so that they wouldn't be in this situation. So the evidence points to the fact that there are delinquent taxes owed by your father.
However, even if there were not, all evidence points to the fact that your father treated this couple underhandedly. Your own words support this. You state that your father padlocked the door because Mrs. Mcham had written hot checks on a joint account she had with your father. However, if this was true, this was a completely separate legal issue from the contract that the Mchams signed to purchase the business.
The Mchams showed Ch 4 their contract as well as receipts for the payments they have made so far. So the Mchams appear to be in compliance with the contract. Therefore your father had no legal right to padlock the business they purchased from him since they were in compliance with the contract. He can't just un-do a legally binding contract because they did something outside the contract that he didn't like, even if it also involves money. So if he did as your own words say, then HE violated the contract and he can be sued for breach of said contract.
I also have to agree with Anna A regarding the statements you are making on here. While I can empathize with your defense of your father, libelous statements against the Mchams can get you into real trouble.
Legal P.
July 12, 2012 at 8:42 am
The Facts are Anna D. that the reason for closesure was not due to back taxes. I am not slandering the Mchams just stating the facts that they left out of the story that aired
Leon J.
July 11, 2012 at 11:01 pm
2 stories...Ch4...time to research and update...
Peter D.
July 11, 2012 at 8:43 pm
Leon J, your comments are misleading. The list you pointed out only covers businesses served with business closure orders, not all businesses with tax debt. Businesses can have tax debt and be forcibly closed without a business closure order. Business closure orders are only one method of closing a business that owes back taxes. The IRS, city and county as well as the state use injunctions, court orders, writs of executions and various other means to close a business and collect back taxes. So while I will not say your posts are lies, they are definitely misleading and possibly slanderous against Mrs. McHam.
Anna A.
July 11, 2012 at 8:24 pm
This is a list of all Sales tax Closesures in the state this business is not listed on the states website,
https://www.ark.org/dfa_bcn/app/result.html
Leon J.
July 11, 2012 at 7:40 pm
Funny how they said they spend their life savings and got a 15 year loan, when in fact this was an owner finance with no money down, This was my dads place, he padlocked the doors not the state. He locked the doors because he had $1014 in hot checks Mrs Mcham had written on a joint account with my dad and always had an excuse not to pay. If the State shuts down a business for back taxes they chain the doors and hang a "failure to pay Sales Tax " notice just like they did at Paradise Donuts in Russellville a few years ago. There was not a tax issue here.
Leon J.
July 11, 2012 at 7:35 pm
Caveat Emptor" should NOT be the motto of the State of Arkansas...it's like the sales tax on used cars...if you're Below a threshhold price you pay NO tax...if Above it you pay on the whole thing , not just the amount OVER the threshold..and Revenue says "GOTCHA!".
Peter D.
July 11, 2012 at 6:50 pm
