Tax Issue Closes Doors Of 5 O’clock Bar For Now

BRISTOL, Tenn. – The Tennessee Department of Revenue locked the doors to downtown’s 5 O’Clock Bar & Grill on Wednesday after seizing the property for failure to pay state taxes.

Red and white wooden signs at the entrance read, “Closed by TN Department of Revenue.” Additional signs state, “This property has been seized for nonpayment of Tennessee State taxes ...” and warn people to not “tamper with this property in any manner.”

Taped just above the warnings were two handwritten notes that read, “Will reopen soon.” 

The old H.P. King building at 620 State St., was renovated by 5 O’Clock Bar and Grill owners Ricky and Rhonda Caudill, who opened the massive facility in February. The entertainment venue is outfitted for music, pool, poker tournaments, beer, karaoke, darts and dining. 

Several anonymous callers to the Herald Courier last week said the venue was on the verge of closing. On Friday, Rhonda Caudill was contacted and tersely said the business was “not about to shut its doors.”

Attempts to reach her on Wednesday were unsuccessful.

The Department of Revenue cannot discuss the specifics of any individual case, but property seizures are normally the result of unpaid tax revenues, said Sarah Jo Houghland, department spokeswoman.

“Seizures are the last resort and are pretty rare,” she said. “More than 97 percent of taxpayers will pay on time, but we have from 300 to 400 seizures each year.”

The establishment is certified by the city to hold 565 patrons, the highest allowed occupancy of any business selling alcohol within the city limits, said Karl Cooler, the city’s codes administrator.
Though the 40,000-square-foot building has three floors, only the first floor and part of the second floor were being used.

As far as the city is concerned, 5 O’Clock has not defaulted on any taxes.

“Their city property taxes are all paid up,” said Mike Sparks, deputy city manager/economic development.

The state’s process to collect unpaid taxes includes a lien placed on the property 90 days after the original notice of deficiency, and the state can seize assets to satisfy the tax liability, Houghland said.

If a business has not filed its tax return, which are normally paid quarterly, and paid its liability by the due date, it is first notified by letter that it owes revenue to the state, according to department guidelines.

If the state does not get a response within 25 days, the case is sent to a call center, where the taxpayer may be contacted over a period of 20 days.

Should the business make no attempt to schedule a payment within the 20-day period, the case is forwarded to a tax enforcement officer for collection, according to the department.

A final demand is then sent, and the business has 10 days to respond. Generally, if a business is seized they’ve been given every opportunity to pay or arrange a payment schedule, Houghland said.

“We’re not allowed to discuss specifics, and they [5 O’Clock] may be in the process of making arrangements to pay,” she said. “And if that’s the case, then it would be a matter of time until they’re allowed to reopen.”

The Caudills also operate a 5 O’Clock Bar and Grill at 35025 Brittany Lee Drive in Glade Spring, Va. That business remains in operation.

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