Miami Springs Mayor Owes $200,000 To IRS

MIAMI SPRINGS (CBS4)- The Internal Revenue Service has filed a lien against Miami Springs Mayor Zavier Garcia for nearly $200,000 in unpaid taxes.

The lien, filed June 8, means the IRS would get paid before Garcia and his wife if they attempt to sell their home or other real estate.

Garcia said the IRS issued the liens after his new accountant detected errors in previous years' tax returns. Garcia said he voluntarily brought the errors to the agency's attention, and plans to pay the money as soon as his finances permit.

The lien is the latest financial problem for the mayor of this city of 13,000 people immediately north of Miami International Airport.

Garcia's home is in foreclosure, and the state says his business owes $1,800 in unpaid sales tax.

According to county records, U.S. Bank began foreclosure proceedings on Garcia's Whitethorn Drive home in September 2009. The matter has been wending its way through the court system since then, and a Miami-Dade circuit judge referred it to mediation in May. The case remains unresolved.

Records show Garcia owes $323,000 on his home, which was assessed by the county last year at $185,000.

Garcia, who runs a marketing firm called ZMG Media, said he is in foreclosure for much the same reason as other South Florida homeowners in the aftermath of the Great Recession.

"Just like many families and households that have suffered during our nation's and region's economic downturn, so too did my family experience financial difficulty," he said. "Our mortgage payments had realized a substantial and unpredictable increase and we needed to adjust. ... We have dealt with our problems responsibly, legally, and in good faith. My family and I are at the brink of resolving this personal crisis with our bank and we will be out of foreclosure very soon."

Garcia was elected last April with 54 percent of the vote.

He isn't alone in having mortgage trouble these days. As of April, about 47 percent of Miami-Dade homeowners with mortgages owed more than their home was worth, according to the real estate research firm CoreLogic. Nearly 20 percent of South Florida homeowners are in foreclosure, according to the Mortgage Bankers Association.

But what separates him from any other homeowner, is that he is the mayor and gets a vote on Miami Springs' $19.6 million annual budget.

Meanwhile, state records indicate that ZMG Media owes $1,803.41 to the Florida Department of Revenue, according to a lien filed by the agency in 2010.

Garcia said that's a mistake, because he resolved the matter as soon as it came up last year, but the state failed to update its records.

Garcia said earlier this month he would provide documents to back up his statements about being the one to tell the IRS about the tax errors and already having resolved the state tax issue, but as of Friday he had not done so.

He said the IRS was surprised when he brought the matter to his attention.

"They're looking at me like I'm an alien with a third eye because I came to them," he said.

Former opposing mayoral candidate, Jaime Petralanda, said he is praying that Garcia's current situation will improve.

"He is going through a bad time and I'd hate to add fuel to the fire," said Petralanda, who is also Garcia's neighbor.

"All I can say is that we are praying for him and I feel for his kids and wife. Other than that I rather stay away from these types of questions."

But Wally Clark, who also ran against Garcia and Petralanda in this year's city elections, had a different opinion.

"I'm sure financial things can happen but here is a man who is dealing with the city finances, so that's odd," said Clark. "We can't have those types of mistakes in our city government. He is losing credibility, and I'd like to see how it plays out."

But Garcia said he sees it differently.

"People ask how can I be the mayor of the city when I am going through these tough times," he said. "I can relate to what people are going through."

(©2011 CBS Local Media, a division of CBS Radio Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. CBS4 news partner The Miami Herald contributed material for this report)