$2.5M lien filed by IRS against Duluth emergency room physician, preservationist
DULUTH, Minn. — Eric Ringsred, a Duluth property owner and preservationist, owes more than $2.5 million in unpaid federal taxes over the past decade, the Internal Revenue Service said in a recent document filed in St. Louis County.
The IRS in May issued a federal lien against Ringsred, reporting that he has failed to pay significant taxes on personal income for each year from 2007 to 2014.
Ringsred, for his part, said he did not file complete federal tax returns for about 10 years, but believes he owes only a fraction of the sum. He said he has been working with the IRS to get it repaid and have the lien removed.
"I had all kinds of stuff going on," he said, "and once you get behind a year or two, all the years build up on the next year. And it goes on and on and on. It's kind of a chore to get it straightened out."
The lien document shows that the IRS is seeking between $246,437 and $420,463 for each tax assessment over the eight-year span — for a combined total of $2,552,032.74.
Ringsred, a 66-year-old emergency room physician, said his accountant died and that he was "overwhelmed with stuff," falling behind on his taxes and finding it difficult to catch up. As a result, he said the government filed the tax return forms for him.
But those returns were based on pre-2007 income levels, when he still operated the Kozy Bar and Apartments in downtown Duluth. He said it also means that the IRS didn't subtract business expenses, tax deductions or building depreciation — but did add in penalties and interest.
Ringsred said his personal income has ranged from about $70,000 to $200,000 in the past 10 years, but claimed that he has essentially had "zero income" after factoring in his business dealings.
Ringsred and a local tax professional who is helping get his books in order said they have been in frequent communication with an IRS agent assigned to the case — and they expect that he'll only end up owing about $20,000 to $40,000.
"I'm hoping it will be resolved by the end of the month," he said.
A federal tax lien attaches to all of an individual's assets, including property, securities, vehicles, and any additional assets acquired during the duration of the lien, according to information in the IRS' website.
It allows the government to levy personal and business property and bank accounts or garnish wages in order to collect the debt. A lien can be removed if the debtor pays the sum in full or makes other arrangements with the IRS.
Ringsred and his company, Temple Corp., have owned several prominent Duluth buildings — but they've also frequently run into issues with tax collectors.
He lost downtown Duluth's Pastoret Terrace building to tax forfeiture last year. The building, formerly home of the Kozy, was ravaged by fire in 2010. Ringsred owed more than $26,000 in taxes and penalties when the property was seized by the county and sold to the Duluth Economic Development Authority. Despite losing the building, Ringsred said he's still making payments on a mortgage.
Ringsred also owned downtown's NorShor Theatre and Temple Opera buildings before selling them to the city for $2.6 million in 2010. At the time, he owed more than $45,300 in delinquent property taxes, including nearly $20,000 on the NorShor building.