Senators on the Senate Local Government and Taxation Committee grilled state tax commissioners this afternoon for failing, five months later, to comply with any of the recommendations in a state-ordered investigation that followed a whistleblower’s report. The report, from a longtime state auditor, charged that the commissioners were cutting secret deals with large, out-of-state corporations to excuse them from paying millions in state income taxes, over the objections of state auditors. Two state investigations concluded no laws had been broken, but a veteran CPA, LaVern Gentry, who investigated the issue for Gov. Butch Otter made several recommendations for changes. Among them were more transparency, including full reports on the deals to the Legislature, and for tax commissioners to provide more support to auditors, who complained that taxpayers sometimes would refuse to even provide information they requested, instead waiting to unveil their information at appeals with the commissioners. Gov. Butch Otter in August ordered the Tax Commission to submit an annual report to the Legislature on the secret deals, starting in January of 2009 - but no report has been sent.
Committee Chairman Brent Hill, R-Rexburg, told Tax Commission Chairman Royce Chigbrow, “I guess one of the points I want to make is this isn’t going to go away. … We’ve got to do something about this. It’s been five months.” He added, “I really want to make it clear that on behalf of the people, we’re holding your feet to the fire on this.” Tax Commission attorney Ted Spangler said the report on the deals has been sitting on his desk for review, and he hasn’t gotten to it. “I will get that off my desk, Mr. Chairman,” he told Hill.
Chigbrow defended the Tax Commission’s approach to settling appeals. “The Idaho Tax Commission and their appeal process works, and I’m very pleased to announce that, despite our little differences of opinion last summer,” Chigbrow told the committee, presenting an annual report on the commission. “We have saved the state a lot of money.” He said settling disputed tax cases can mean big savings over taking them to court. “If you take it to a court, the best chance is there’s a 50-50 chance you are going to win, because there are two opinions,” he told the senators.
Asked by Hill how he saw the role of the Tax Commission, Chigbrow said, “I believe the role of the Tax Commission … is to see that the tax laws of the state of Idaho are administered in a fair and equitable way. … The role is not to go out and make sure that you shake every cent out of everybody’s pocket.”
After the hearing, Hill, a CPA himself, said he wasn’t satisfied with what he’d heard. “It should not be on the back burner, it should be on the front burner,” he said, “and from that standpoint, I’m disappointed.”