Josh Welle Under Fire For Owing Back Taxes

RUMSON, NJ — Josh Welle, the Democrat running for Congress in Monmouth and Ocean counties, came under fire this week for allegedly owing more than $130,000 in back taxes to the state of Delaware for his now-defunct software company.

However, the Welle campaign said the whole is a "paperwork error" and blamed the mistake on the company's business agent, which reportedly severed ties with Welle after they were not paid their fees.

Welle formed a software company Severn Pacific in 2015 and he often touts his business acumen, particularly in the fields of IT and STEM-related industries. Welle has often said Severn Pacific has since been dissolved. However, a conservative Monmouth County blog, More Monomouth Musings (which actively supports Welle's opponent, Republican Congressman Chris Smith), did some digging this week and found that Severn Pacific still owed the state of Delaware $130,424.14. A screenshot of those tax records is here:

MoreMonmouthMusings published their article on Tuesday, Oct. 2 of this week. However, when Patch signed into the Delaware tax records on Thursday, we found that back taxes for Severn Pacific had been paid off and the company was listed in "good standing" with the state of Delaware. Screenshot:

Welle's campaign blamed it on a "paperwork error."

“This is a desperate attempt by the Smith campaign to tarnish the reputation of a veteran who fought for this country,” said Kim Maier, the campaign manager for the Welle For Congress campaign.

Welle’s business ceased operations in the summer of 2017, she said. The company’s external business agent, Lewes, Delaware-based Harvard Business Services, failed to file the correct paperwork to the state, she said. Because state documents were not properly filed, the company accumulated fees in 2018, as if it were operational.

"Since this administrative oversight has been brought to light, all dissolution paperwork has been filed with the state and the outstanding administration franchise tax fees (approximately $1,000) have been paid," she said.

Business agent disputes timeline, quit over unpaid fees

The Welle campaign released this statement Thursday afternoon. However, MoreMonmouthMusings then contacted Harvard Business Services later that same day, and an employee told the blog that they resigned as Severn's business agent in September of this year because the company did not pay their agency fees.

Courtney Sharp of Harvard Business Services also said that her company did not receive a dissolution order in the summer of 2017, as the Welle campaign told NewJerseyGlobe. She said that HBS was engaged to dissolve the company and resolve the past due taxes on October 2, the same day the tax issue was first reported on the conservative blog.

When Patch called Harvard Business Services Friday morning, they said they could not speak to the media, and an email to vice president Michael Bell was not immediately returned.

“The issue was due to an error in filing paperwork and exemplifies what is wrong with a bureaucratic tax system tax,” said Maier in a statement. "Small-business owners have too much red tape to cut through, and, as someone who was able to start a business, Josh knows the reality of everyday families in Central Jersey."

So far, Welle has raised an impressive $1.3 million to unseat Smith. Some fairly big names in the Democratic party are starting to come out for Welle: Former Massachusetts Gov. Deval Patrick will appear with Welle at a private breakfast this Saturday, Oct. 6 in Spring Lake. That will be held at 9 a.m. tomorrow. Patrick will then again appear at a campaign rally with Welle at the Campus at Macedonia in Neptune at 11:30 Saturday.

Do YOU live in the 4th Congressional district?

Welle bought a home in Rumson before he decided to run for Congress in New Jersey's 4th district.

The fourth congressional district covers nearly all of Monmouth County, including towns such as Holmdel, part of Middletown, Colts Neck, Rumson, Manalapan, Freehold, Red Bank and Wall Township. The fourth district also reaches into Jackson and Lakewood in Ocean County and Hamilton and Robbinsville in Mercer County. The district has voted for a Republican in the past four presidential elections by comfortable margins: Trump, Romney, McCain and Bush.

Despite efforts, Democrats haven't been able to unseat Smith, who has represented the area since 1981. Some speculate the 2018 midterms could be a year of change, as Democrats hope to ride a wave of anti-Trump backlash.

The election will be Nov. 6.

Photo credit: Photo of Josh Welle and his wife, Angela, at a campaign event in August of this year. Carly Baldwin/Patch