City Councilwoman and mayoral candidate LaToya Cantrell has paid off a federal income tax debt that had grown to about $30,000, according to a letter from the Internal Revenue Service.

In July, The Lens reported that Cantrell and her husband, attorney Jason Cantrell, owed almost $28,000 in unpaid income taxes. The IRS placed a lien, which is a claim on a piece of property for an unpaid debt, on their house in 2014.

In a July interview, Cantrell said she and her husband had filed their income tax returns for 2010, 2011 and 2012, but the IRS determined they had underpaid.

She said the taxes should have been paid several years ago, after the couple refinanced their Broadmoor home for about $210,000 with First NBC Bank. A portion of the loan — about $24,000 — was supposed to be held in an escrow account and released to the IRS, she said.

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But the IRS never got the money. Cantrell blamed it on a mistake by First NBC.

“All the time we were paying our mortgage at the refinanced amount,” she said in July.

First NBC collapsed last spring, and Cantrell’s account was transferred to Whitney Bank.

Last month, Whitney sent the Cantrells a check payable to the U.S. Treasury, according to a letter from Whitney President Joseph Exnicios.

Exnicios’ letter, which LaToya Cantrell provided to The Lens, does not say the problem was due to First NBC’s error.

Exnicios said in a phone interview he doesn’t know what happened with the mortgage while it was under First NBC’s control, so he couldn’t say whether the bank had failed to release the funds or the Cantrells had failed to authorize it.

The terms of the escrow agreement weren’t publicly available because it wasn’t filed with the mortgage documents in parish land records. The Cantrell campaign didn’t immediately answer questions about the letter, but said in a news release that First NBC had “mishandled funds.”

After the Cantrells contacted Whitney to resolve the issue, Exnicios said, the bank checked to see if the money was in the escrow account and could be released.

“As soon as we were able to determine that her request was a valid request for those funds to be released, we did that,” he said. “I’m not sure I personally would have been as patient as the Cantrells. … They were a bit frustrated.”

“I’m not sure I personally would have been as patient as the Cantrells. … They were a bit frustrated.”—Whitney President Joseph Exnicios

Cantrell gave The Lens an Aug. 21 letter from the IRS stating that the debt had been satisfied. The original lien, filed in 2014, showed an outstanding debt of $27,564.99 in back taxes, interest and penalties.

The letter showed that a debt of $30,244.35 for the same tax years was satisfied last month, although the amounts for each year were substantially different from those in the 2014 lien.

Cantrell spokesman David Winkler-Schmit, reached by phone, could not immediately explain the differences between the lien and the letter.

The IRS files an official lien release in parish land records after property owners have paid their debt. The Lens could not find one for the Cantrells, but the IRS’s letter notes that it could take 30 days for the release to be filed. That deadline hasn’t passed yet.

Cantrell said they refinanced the house to pay the tax debt and repair damage from Hurricane Katrina. Exnicios’ letter says another $10,700 of the mortgage loan has been held in escrow to pay for property repairs. That will now go toward the loan, he wrote.

Charles Maldonado

Charles Maldonado is the editor of The Lens. He previously worked as The Lens' government accountability reporter, covering local politics and criminal justice. Prior to joining The Lens, he worked for...