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IRS Denies Misconduct In Tax Raid At Day Care Center

January 19, 1985

ALLEN PARK, Mich. (AP) _ Internal Revenue Service agents raided a suburban day-care center to collect unpaid taxes, an agency spokesman says, but he denied parents’ allegations that agents used the children as ″collateral″ to force payment.

The raid at the Engleworld Day Care Center in this Detroit suburb led to an IRS investigation after U.S. Rep John Dingell complained to the agency, The Wyandotte News-Herald reported.

A telegram sent to the IRS by the Democratic congressman said he was ″distressed with reports and allegations that IRS tactics constituted harrassment of innocent citizens, causing undue fear and alarm among children and parents alike,″ the newspaper reported.

Walter Dunnigan, IRS public affairs officer, said Friday there was no impropriety or misconduct on the part of agents who participated in the Nov. 28 raid.

Dunnigan said agents were ordered to seize assets of the day-care center to force payment of $14,000 in taxes withheld from employees’ salaries. The payments were as much as two years late, he said.

Agents placed the children in two rooms, segregated by age, and placed a table at the door leading to the rooms where parents who owed money to the day-care center were asked to either pay or sign notices of levy, which informed them that the money owed should be paid to the IRS, he said.

″The way it was handled was, as a parent appeared, the child got his coat on and came to the desk. After that happened, the parent would have been explained the notice of levy,″ Dunnigan said.

″There certainly was every effort made to care for the children. The plan was to have the child with the parent before the notice of levy was explained,″ he said.

But one parent had a different account.

″It was like something out of a police state,″ said Sue Stoia in an interview with the News-Herald. ″They indicated you could not take your child out of the building until you had settled your debt with the school, and you did that by signing a form to pay the IRS,″ she said. ″What we were facing was a hostage-type situation. They were using the children as collateral.″

Engleworld Director Marilyn Derby said the agents told her to calculate the amount each parent owed the center so the notices could be distributed.

″Parents were not allowed to see their children until they had signed an agreement with the IRS,″ she told the newspaper. ″It was a very scary situation, like the Gestapo was here. Children were crying, parents were trembling.

″I told one woman whose hands were shaking that she shouldn’t sign anything she didn’t want to. She signed anyway.″

Dunnigan said the tax agency’s inspection service began an investigation Monday.

″It is my understanding that their findings show no improprieties whatsoever,″ Dunnigan said, ″and that’s including from the interviews of parents, with the exception of two parents apparently feeling the perception of uneasiness or uneasy situation.

″But in terms of misconduct by our people, there was none of that alleged.″

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