For two months, Uber Eats withheld proceeds from a takeout order valued at over $ 11,000 from International Wings Factory, a popular chicken restaurant on Manhattan’s Upper East Side..
The reason? An unpaid invoice for $ 498.97 from the Internal Revenue Service.
The IRS contacted the restaurant’s vendors late last year, including Uber Eats, placing a lien on International Wings Factory accounts and ordering vendors to pay the U.S. government first from all the funds they owed the restaurant.
Restaurant accountant Gus Kreatsoulas said the debt was an innocent mistake in filing a tax return in late 2020. Uber and GrubHub both sent checks to the IRS for the unpaid debt.
Nonetheless, Uber Eats continued to withhold money at International Wings Factory for all of the food deliveries it made during the month of November – leaving the cash-strapped restaurant operations hanging on a wire, has its owner and chef, Deepak Ballaney, told The Post.
The check for $ 11,200 finally arrived on Tuesday – shortly after The Post inquired about it.
It was the end of an ordeal that also involved other restaurants, according to industry experts. In June, the IRS began its collection efforts from small businesses after more than a year of suspension, and “all tax authorities have become extremely aggressive,” said Richard Rosenkrantz, consultant for accounting firm Citrin Cooperman.
One of his clients was recently hit with an $ 80,000 lien from the IRS, which attacked the restaurant’s GrubHub claims, Rosenkrantz said. GrubHub withheld $ 7,000 in delivery notes until Rosenkrantz intervened, securing a “hold” from the IRS on garnishments, according to the accountant.
“We are still working with the IRS on this issue,” he said. “We think they are wrong about the penalties they imposed on our client.”
Grubhub declined to comment.
In the case of International Wings Factory, Ballaney had asked its Uber account representative on November 18 to “send an email address or even a contact from someone higher up.” I have an overdraft from my bank and I have no money to pay my salaries, ”he pleaded. Although he apologized, the representative only offered numbers to more call centers.
In response, a representative for the Uber Eats account told him on Jan. 4, “It’s happening to other restaurants and the past few weeks have been incredibly slow due to the holiday season,” according to a text shared with The Post.
Uber Eats spokesman Harry Hartfield confirmed the IRS received the $ 498.97 International Wings Factory owed, but he did not explain why Uber Eats did not immediately cough up the 11. $ 200 he owed at the restaurant.
“The crux of this situation is that Uber Eats did not follow the proper protocols,” Bellaney’s accountant Kreatsoulas told The Post. “UberEats should have sent him his checks as soon as he sent the IRS check.”
GrubHub, for its part, has never interrupted payments from International Wings Factory. He informed the restaurant that he had received a request from the IRS and paid the amount while continuing to send the restaurant his delivery order payments, according to an email that was shared with The Post.
In fact, the IRS has now been overpaid for that debt and now owes Bellaney a refund, Kreatsoulas said.
Uber Eats, Bellaney added, “acts like it can do whatever it wants, just because it’s a big business and we’re a small business.”