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An Alexandria couple pleaded guilty to conspiracy in relation to filing false tax claims for their Maryland-based auto body repair shop, and have been ordered to pay $2.2 million in restitution.

Ercin Kalender, 60, and Lizette Kalender, 44, own Butch’s Auto Body in Capital Heights, and were ordered to pay the $2.2 million as part of their plea agreement, according to an announcement from the U.S. Department of Justice.

Between 2015 and 2018, the Kalenders kept two sets of books — one set with actual revenues, and another with lower reports of taxable income that were sent to the Internal Revenue Service.

“The corresponding tax loss to the IRS for the four years was $2,219,602,” DOJ said in a release.

The couple, who were trying to sell the shop in 2018, were busted in a sting operation in 2018. An undercover federal agent posed as a potential buyer and both Ercin and Lizette Kalender revealed a longstanding practice of underreporting revenue and income.

“Further, Ercin explained that while Butch’s filed tax returns showed $2.2 million in gross receipts, the actual gross receipts were closer to $3.1, $4.2, and $3.9 million for the fiscal years for 2015, 2016, and 2017; respectively,” according to DOJ. “Ercin also informed the agent that Lizette also reported sizable W-2 income, which helped them evade scrutiny by the IRS… In 2019, after the Kalenders became aware of the IRS’s investigation, Butch’s reported gross receipts of more than $4.5 million, an increase of more than $2.2 million over the fiscal year 2018,”

Additionally, the couple paid a portion of their employees in cash and falsely reported wages to the IRS.

“In a conversation with the undercover agent, Ercin stated that he paid all his employees’ extra compensation in cash to avoid tax obligations except for one secretary who was not paid under the table,” DOJ reported.

The couple go to court for sentencing on May 26 and face a maximum sentence of five years in prison and three years of supervised release.

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In a glimpse at financial assessments for 2022, Alexandria Mayor Justin Wilson said on Twitter that declining hotel revenue — and thus taxes paid to the city — will put more of the city’s tax burden on residents.

The decline of tax revenue for the City of Alexandria is just one part of a difficult financial recovery from the pandemic — one exacerbated by the omicron surge earlier this winter. While sales and meals tax have rebounded slightly, the dearth of hotel funding has even led the city to consider investing in a new hotel.

“In 2019, there were 31 hotel properties in the City of Alexandria worth a total of $753 million,” Wilson said. “Today, those 31 hotel properties are assessed at a total of $464 million.”

That’s a 38% drop in the value of hotel properties in the city.

Meanwhile, Wilson said average assessments on single-family homes and condos have increased city-wide.

The real property assessments are scheduled to be reviewed at a City Council meeting on Tuesday, Feb. 8. A report prepared for the meeting indicates that the gulf between the commercial and residential tax base could widen this year.

Commercial vs residential tax base distribution, image via City of Alexandria

The report said there’s been a $915.86 million growth in commercial assets in Alexandria, with a 15.36% increase for warehouses and a 10.33% increase for apartments offsetting a 12.5% decline in commercial assets for hotels and 6.47% decline in shopping centers.

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Alexandria is about to embark on a public relations campaign in response to the 5 cent Plastic Bag Tax, which goes into effect next month.

In a meeting on Tuesday, Dec. 14, the City Council will consider the release of $30,000 from contingent reserves to the city’s Department of Transportation and Environmental Services for outreach on the matter.

The tax goes into effect Jan. 1, 2022. According to the city, the collected taxes will be used for:

  • Environmental Cleanup;
  • Providing education programs designed to reduce environmental waste;
  • Mitigating pollution and litter; or
  • Providing reusable bags to recipients of Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC) benefits

“The City’s adopted FY (fiscal year) 2022 operating budget included $30,000 in Non-Departmental Contingent Reserves to develop and produce resources for graphics, advertisements, window clings, and to purchase reusable tote bags for distribution to low-income households,” the city said.

The Virginia General Assembly adopted Sen. Adam Ebbin’s (D-30th) legislation last year allowing localities to impose a bag tax. Neighboring jurisdictions Arlington and Fairfax County also adopted bag taxes.

The $30,000 would be spent in the following way:

  • $5,000 allocated for printing and postage (developing graphics, printing mailers, window cling stickers, notification letters for stakeholders);
  • $9,500 to purchase reusable bags for low-income households and Supplemental Nutrition Assistance Program (SNAP)/ Women, Infants and Children (WIC) beneficiaries;
  • $8,000 in temporary staffing hours (hours for reusable bag distribution events, conducting street outreach to regulated businesses); and
  • $7,500 allocated for advertisements (social media, local newspapers, and/or bus shelters)
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New data from tax collection over the summer shows a minor rebound for sales and meals in Alexandria, but while it’s a positive sign, Mayor Justin Wilson cautioned that they don’t quite tell the full picture.

In March, local sales tax revenue reached a high of nearly $3 million. Since the start of the year, sales tax revenue has been higher than it was in those respective months the last two years, but the fact that COVID-19 seemed to have a negligible impact on sales last summer indicates that most of that is driven by online sales rather than local business, which Wilson confirmed.

“Sales tax strong,” Wilson wrote on Facebook, “but driven by online sales.”

The brighter news was for the restaurant industry, where meals tax revenue overshot even 2019’s numbers in both June and July. As of the end of August, the city had collected $2.6 million in meals tax revenue as compared to $2.3 last year, which had been boosted by a strong start to the year before those figures tanked in March and April.

But transient lodging tax figures remain abysmal: $776,805 total as compared to $312,598 last year. Regionally, hotels have faced an uphill battle toward recovery, with hotels around the region estimated to lose $2.3 billion in revenue this year.

Last year, Kendel Taylor, the city’s director of finance, warned that full economic recovery from the COVID-19 pandemic could be at least two years away. While the numbers are promising, Wilson warned there is still more work to do to get the city’s businesses back on track.

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Police outside the McDonalds where a shooting occurred, staff photo by James Cullum

What a busy week in Alexandria.

Our top story this week was on a juvenile who was shot outside the McDonald’s at the Bradlee Shopping Center on Tuesday, Sept. 21. There have also been a number of concerning incidents at Alexandria City Public Schools, including a juvenile who was arrested for trespassing and assault and battery at Alexandria City High School.

Meanwhile, while the COVID-19 transmission rate remains high, public events are still happening in Alexandria.

Important stories

Top stories

  1. Police: Juvenile shot at shopping center near Alexandria City High School
  2. Police dispatched three times for fighting at Alexandria City Public Schools in less than a month
  3. Police: Six hospitalized after overdoses on Alexandria-Fairfax border
  4. Poll: What do you think of Metro’s proposed Blue Line crossing to National Harbor?
  5. BREAKING: Flooding reported in Alexandria
  6. Interview: Port City Publius opens up about Alexandria
  7. BREAKING: Video shows brawl at Alexandria City High School cafeteria just two days after school starts
  8. Juvenile arrested for trespassing and assault and battery at Alexandria City High School
  9. Multiple violent charges dropped against Fairfax County man held without bond for assaulting police during arrest
  10. Preserving Arlandria’s affordability against gentrification could cost upward of $100 million
  11. JUST IN: One person injured after shots fired in West End Tuesday afternoon

Have a safe weekend! 

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This weekend, the Alexandria City Council unanimously approved a new five-cent tax on plastic bags — though with some grumbling that Arlington had beat them to the punch by a few hours.

The tax will only be applied to grocery stores and convenience stores, not restaurants or other businesses, and is similar to taxes implemented in D.C. and other localities across the country. Groups collecting trash around the area reported a three-quarter decrease in the amount of plastic bags being picked up and overall decreased plastic bag use — though some of those results have been brought into question.

There were two public speakers at the meeting, both of whom endorsed the tax.

“The bag tax is an effective and inexpensive way of reducing plastic pollution,” said Michael Olex, vice-chair of the Environmental Policy Commission. “It’s effective, as demonstrated in other communities such as D.C. It’s inexpensive because consumers, once they acquire bags, aren’t spending any money. Stores purchase less bags, so their costs can go down. Cities and other entities are spending less money cleaning up pollution. I urge the council to adopt this measure both for citizens of Alexandria and the environment.”

Public speaker Al Clark said the bag tax proposal should be an easy choice, particularly in the face of other harder environmental choices the city will face down the line.

“Obviously this has been a long-time coming, something we’ve been talking about for a while,” Wilson said. “Going back… Tim Lovain was advocating for this for years, long before it was really popular, and [we] looked at him kind of funny when he did but he was certainly right on this. Unfortunately we are the third to adopt it in the region by a matter of hours (beat by Arlington and Fairfax).”

Arlington adopted a similar tax a few hours earlier, and Fairfax bagged the approval a week earlier.

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Ahead of a public meeting tonight (Wednesday), Mayor Justin Wilson outlined what’s being proposed and next steps.

“The plastic bag tax has long been floated,” Wilson said in a town hall last week, noting that a similar tax is already in place in D.C. “Senator [Adam] Ebbin, who represents the east end of Alexandria, proposed legislation that allows local governments to opt in for the plastic bag tax.”

According to the city, the tax could be used for:

  • Environmental Cleanup;
  • Providing education programs designed to reduce environmental waste;
  • Mitigating pollution and litter; or
  • Providing reusable bags to recipients of Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC) benefits

Wilson said the tax will only be applied to grocery stores and convenience stores, not restaurants or other businesses. The tax would also be five cents per bag, which Wilson said isn’t a lot in terms of having spending money for infrastructure projects, but the other goal is in discouraging the use of plastic bags and reducing littering.

An un-scientific poll of ALXnow readers found that 61% opposed the tax.

Following the public information session, a draft ordinance will be presented to City Council. If approved, the tax could go into effect as early as January 2022.

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Morning Notes

Proposed plastic bag tax meetings scheduled in Alexandria — “The first meeting is a virtual public information session on Wednesday, Sept. 8 from 7 p.m. to 8 p.m.” [Patch]

New restaurants on the horizon — “Three new restaurants are moving forward with plans to open — they all have applications for various permits on the Thursday, Sept. 9 Planning & Zoning commission docket.” [Alexandria Living]

Old Town Festival of Speed and Style is this Sunday — “Featuring over 100 rare and exotic supercars and motorcycles from around the world – combined with dazzling and glamorous fashion elements and events – the festival celebrates the heart and spirit of the community and highlights the elegance and style of Old Town. It is free to spectators and open to all.” [Visit Alexandria]

Today’s weather — “Mostly sunny skies. High 78F. Winds NNW at 5 to 10 mph… A few clouds (in the evening). Low near 60F. Winds NNE at 5 to 10 mph.” [Weather.com]

New job: Assistant chocolatier — “As a production assistant you will mainly work alongside the owner and other chocolatiers to make and package truffles, chocolate bars, and other confections for retail sale and shipment. Occasionally you will need to assist with the retail side of business and help customers in-person and over the phone with chocolate selections.” [Indeed]

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Cat and plastic bags, photo via Daniel Romero/Unsplash

(Updated 11 a.m.) The city of Alexandria is considering implementing a new 5 cent bag tax at local stores; aimed at curbing plastic bag use and providing funding for enviromental clean-up and other projects.

A similar 5 cent bag tax was implemented in D.C. in 2010, and groups collecting trash around the area reported a three-quarter decrease in the amount of plastic bags being picked up and overall decreased plastic bag use — though some of those results have been brought into question.

The city said funding collected from the plastic bag tax could be put to use with:

  • Environmental Cleanup;
  • Providing education programs designed to reduce environmental waste;
  • Mitigating pollution and litter; or
  • Providing reusable bags to recipients of Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC) benefits

Photo via Daniel Romero/Unsplash

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After getting approval from the General Assembly last year, next month Alexandria will consider adopting a 5 cent plastic bag tax at drug stores, grocery stores and convenience stores.

The proposal, which has been in the works since 2017, will be discussed in a virtual information session on September 8 at 7 p.m.

The Virginia General Assembly adopted legislation last year allowing localities to impose a bag tax. Alexandria has supported legislation that limits use of plastic bags for the last three years.

“Lightweight plastic bags are commonly found in waterways as litter and remain as a pollutant,” the City reported. “Wildlife commonly mistake plastic bags for food and also cause microscopic particles of broken down plastics to enter into the food chain.”

Staff are planning to present a draft ordinance to City Council with an effective date of January 1, 2022.

According to the city, the collected taxes will be used for:

  • Environmental Cleanup;
  • Providing education programs designed to reduce environmental waste;
  • Mitigating pollution and litter; or
  • Providing reusable bags to recipients of Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC) benefits
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