Ron’s Spaghetti House & Seafood in Smithfield will go on the auction block next Thursday (August 9) unless the owners’ appeals to the Internal Revenue Service to stop the auction are accepted.
Congressman Patrick Kennedy, D-RI and Tax Attorney James Redding of Providence law firm Hinckley Allen & Snyder have been enlisted to support Ron’s appeal.
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David Ducharme, vice-president, co-owner and kitchen manager of Ron’s for the last 23 years, is unhappy with the starting bid price of $104,050. He fears he will receive less than he owes and will face the potential for a deficiency judgment.
The IRS seized the restaurant, located on Route 116, also known as Washington Highway, on May 8.
Ducharme said he would rather put the restaurant into the hands of a commercial real estate firm than watch the IRS handle it.
A spokeswoman for the IRS said there was a good chance the federal agency would withdraw its plan to auction the property.
“The $250,000 total, which includes the finances and paperwork $215,000 owed to the IRS and the $35,000 to the state, can easily be covered by a sale of the restaurant on the open market if the IRS lets us sell it,” he said.
Ducharme said two nearby restaurants with less seating than Ron’s 142 seats, sold for more than the amount Ron’s owes, citing Steere’s in Smithfield and Gator’s Pub in North Smithfield..
Congressman Kennedy agreed to help Ducharme after receiving a letter from him late last month.
Kennedy wrote a letter to Carol Lima, director of Taxpayer Advocates Office of the IRS, requesting the cooperation of the IRS, in stopping the auction.
Kennedy Press Secretary Larry Berman said the congressman rarely gets involved with the IRS, but there are special circumstances.
“When we’re asked by a constituent we try to help local businesses, but it’s ultimately the IRS that will decide,” he said. “We’re just trying to expedite the case on behalf of Ron’s.”
IRS Account Representative Alex Passarelli, who is handling the case, said he could not comment on the case because of disclosure laws, but Media Relations Specialist Peggy Riley said there is a good chance the IRS will agree to stop the auction.
“We try all other avenues before a property goes to auction,” she said. “We certainly don’t auction properties every day.”
Even if the property is auctioned for a low price, the owner has 180 days to redeem the property by paying the balance due.
Ducharme has already sold all of the kitchen equipment and dining tables in the restaurant. He said his dream would be to sell the restaurant for a price he thinks is fair, and perhaps work there as the cook.
“I would like to just pay everybody off, and start all over without owing anybody any money,” he said.
