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Uber Eats withheld more than $11K owed to NYC restaurant over $500 IRS debt

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For two months, Uber Eats withheld takeout order proceeds worth more than $11,000 from International Wings Factory, a popular chicken joint on Manhattan’s Upper East Side.

The reason? An unpaid bill of $498.97 from the Internal Revenue Service.

The IRS contacted the eatery’s vendors late last year, including Uber Eats, placing a lien on International Wings Factory’s accounts and ordering vendors to pay the US government first from any funds they owed the eatery. 

The restaurant’s accountant, Gus Kreatsoulas, said the debt was an innocent mistake linked to filing a late 2020 tax return. Uber and GrubHub both sent checks to the IRS for the unpaid debt.

Nevertheless, Uber Eats continued to withhold money from International Wings Factory for all of the food deliveries it made during the month of November — leaving the cash-strapped restaurant’s operations hanging by a thread, its owner and chef, Deepak Ballaney, told The Post.

Deepak Ballaney posted an Instagram video about his late Uber Eats payments.
Deepak Ballaney, owner of International Wings Factory, took his complaints about Uber Eats to social media.
Courtesy of @internationalwingsf

The $11,200 check finally arrived on Tuesday — shortly after The Post made inquiries about it.

It was the end of an ordeal that has likewise embroiled other restaurants, according to industry experts. In June, the IRS began its collection enforcement efforts on small businesses after more than a year of suspending them, and “all of the taxing authorities have become extremely aggressive,” said Richard Rosenkrantz, a consultant for accounting firm Citrin Cooperman. 

One of his clients was recently hit with an $80,000 lien from the IRS, which went after the restaurant’s GrubHub receivables, Rosenkrantz said. GrubHub withheld $7,000 worth of delivery orders until Rosenkrantz intervened, obtaining a “hold” from the IRS on the garnishments, according to the accountant.

A text message from an Uber Eats rep.
An Uber Eats rep sent Ballaney a text explaining why the delivery service was late paying him.

“We are still working with the IRS on this issue,” he said. “We think they are wrong on the penalties they charged our client.”

Grubhub declined to comment.

In the case of International Wings Factory, Ballaney had asked his Uber account rep on Nov. 18 to “send an e-mail address or even a contact of someone higher up. I have overdrawn from my bank and I have no funds to pay my salaries,” he pleaded. Although apologetic, the rep only offered numbers to more call centers.

The Uber Eats app displayed on a smart phone.
Uber Eats has been a lifeline for restaurants during the pandemic.
Bloomberg via Getty Images

In response, an Uber Eats account rep told him on Jan. 4, “This is 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 that the IRS has been paid the $498.97 that International Wings Factory owed, but he did not have an explanation for why Uber Eats didn’t immediately cough up the $11,200 it owed the eatery.

“The crux of this situation is that Uber Eats didn’t follow proper protocols,” Bellaney’s accountant Kreatsoulas told The Post. “UberEats should have sent him his checks as soon as it sent the IRS check.”

Food being served on a plate .
International Wings Factory cuisine was part of a Food Network festival in October.
Getty Images for NYCWFF

GrubHub, for its part, never interrupted International Wings Factory’s payments. It informed the eatery that it had received a request from the IRS and paid the amount while continuing to send the eatery its delivery order payments, according to an email that was shared with The Post.

In fact, the IRS has now been overpaid for this debt and owes Bellaney a refund now, Kreatsoulas said.

Uber Eats, Bellaney added, “acts as if they can do whatever they want, just because they are a big corporation and we are a small business.”

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