Janesville67.8°

IRS shutters Schulers

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JAMES P. LEUTE
May 29, 2008
— Gavin McCarten likens his Janesville employer to a dog chasing its tail.

“It seems like we’re always robbing Peter to pay Paul, and then robbing Paul to pay Peter,” McCarten said Wednesday, just hours after Internal Revenue Service agents closed Country Furniture by Schulers for nonpayment of taxes.


“It’s tough for a small business to make it in this world anymore,” McCarten said.


McCarten, a builder and trainer who has worked for the family business off and on since 1997, said 25 to 30 federal agents showed up at the business at 1405 Riverside St. about 9 a.m., Wednesday to take possession of the property. Employees were told to gather their personal belongings and leave, he said.


“It came as total surprise,” owner Steve Schuler said of the arrival of IRS agents. “We just had some old baggage that finally caught up with us.”


That baggage includes more than $2.5 million in tax liens against Country Furniture for unpaid quarterly employment and annual federal unemployment taxes that date back to 1998, according to documents filed at the Rock County Courthouse.


The outstanding tax bill, however, is of no surprise to Schuler, who said he’s been in weekly contact with the IRS for the last year and has been making payments on the outstanding balance.


The Wisconsin Department of Revenue also has filed tax warrants against Schuler for failing to pay withholding taxes.


Schuler said the $2.5 million IRS total is high, but declined to reveal the actual amount owed the IRS. The IRS said the figures represent a snapshot in time and could be higher or lower, depending on whether payments have been made and how penalties and interest have accrued.


An IRS spokesman in Milwaukee would not discuss the case specifically, but the agency’s Web site said the IRS tries to work with delinquent taxpayers and seizes property only after providing opportunities to pay the debt, make arrangements to pay or supply information to show that payment would create hardship.


It’s uncertain whether Schuler has enough time to save his business, which makes and sells old-world-style furniture. He said the IRS has told him that he will have 45 to 60 days before the agency auctions off the business’ assets, equipment and inventory.


Schuler has been consulting his attorneys, and it’s his intention to save the business. He also plans to contact his customers to discuss the status of outstanding orders.


“We’re not going to just go away,” he said. “We still have loyal customers, and we’ve been in business for 35 years. Walking away is not the way we do things.”


McCarten agreed, saying he and his co-workers have a sense of teamwork and dedication that will help them fulfill customers’ orders.


They’ve done it before in bad times, and they’ll do it again, he said.


“We love our jobs, even though there have been financial hard times,” he said. “There have always been rumors around town that you couldn’t cash a check from Schulers, and sometimes we would go a few weeks without cashing paychecks.


“But we have faith in the business. I’m sure there were some management flaws along the line, but I believe we can pull it back together.”


Schuler said his workforce comprises “35 of the most wonderful people in the world.


“There have been weeks when they couldn’t take their checks to the bank, but we’re square across the board right now on our payroll,” he said, adding that recent business has been pretty good in a tough economy.


Country Furniture by Schulers moved from its Main Street store into the former Panoramic building on Riverside Street last spring. Ken Hendricks renovated the building and leased it to Schuler and two other businesses.


Schulers operates in about 40,000 square feet of the building, which includes an impressive 11,000-square-foot showroom.


Hendricks also bought the Schulers building on Main Street and hoped to someday turn it into a marina. He died, however, in December.


“Ken Hendricks really helped us get the business going in the new building,” McCarten said. “He saw the passion of the people here, and he really wanted to see Schulers succeed.


“I think he would be rolling over in his grave with what happened (Wednesday).”



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