The Associated Press reports today that public records it obtained under the Idaho Public Records Act show Idaho State Tax Commission Chairman Royce Chigbrow intervened on behalf of clients of his son's accounting firm, over the objections of Tax Commission employees, bringing the clients significant breaks on their taxes. "The heavily redacted documents were among those collected by the Idaho attorney general's office while representing the Tax Commission in a pending lawsuit that alleges commissioners have given politically connected taxpayers secret sweetheart deals for years," reports AP reporter John Miller. Click below to read his full story.
Among the incidents detailed in the documents: Chigbrow's son's firm sent the chairman an e-mail in February seeking to reduce a state-recommended payment plan of $2,000 monthly for a client to $500 per month to satisfy an estimated $50,000 tax bill. The firm later received the reduced plan, over objections from the commission's staff. In November 2007, Chigbrow's former accounting firm, now run by his son, sent him two e-mails asking him for help in waiving tax penalty payments of $931.20 and $644.04. "Can you forward this request to someone in the appropriate department," the firm's e-mail requests at 10:51 a.m. Nov. 15. Eight minutes later, Royce Chigbrow forwarded the message to an unidentified Tax Commission employee. "Would you follow up on this," he asks. A third e-mail from an employee shows the taxpayer received the abatement the next day.
Chigbrow, former longtime campaign treasurer for Gov. Butch Otter, denied any wrongdoing and said he just passed along messages. Lawmakers from both parties are now talking about ways to restructure the state Tax Commission, which now is operated by four political appointees.
Employees: Idaho tax commish helped son's client
By JOHN MILLER, Associated Press
BOISE, Idaho (AP) — Idaho Tax Commission employees say commission Chairman Royce Chigbrow intervened on behalf of his son's accounting firm over objections from agency workers, according to e-mails and other documents obtained by The Associated Press.
The heavily redacted documents were among those collected by the Idaho attorney general's office while representing the Tax Commission in a pending lawsuit that alleges commissioners have given politically connected taxpayers secret sweetheart deals for years.
Chigbrow's son's firm sent the chairman an e-mail in February seeking to reduce a state-recommended payment plan of $2,000 monthly for a client to $500 per month to satisfy an estimated $50,000 tax bill. The firm later received the reduced plan, over objections from the commission's staff.
In a written response to questions Wednesday, Chigbrow, an appointee of Republican Gov. C.L. "Butch" Otter, said he has always acted to minimize conflict of interest or any perception of one.
"I was not involved in the case beyond receiving the inquiry from a taxpayer's representative," Chigbrow wrote to the AP. "I have always recused myself from any business transactions that involve my former partner, my former accounting firm, or cases that involve my son's representation of clients."
Some Idaho lawmakers are talking about reforming the commission next year, saying the commission's makeup of political appointees leaves it vulnerable to conflicts.
Tax Commission employees declined to speak on the record. Due to the redactions, the identities of all the employees involved in the case wasn't clear.
But the documents obtained under Idaho Public Records Law show that Cordell Chigbrow's firm — Chigbrow, Ryan and Co. — sent the chairman a message Feb. 24 asking for assistance. It was just days after the firm was rebuffed by agency staff who balked at the reduced payment plan, which would take 10 years to pay off the debt.
"We had offered a payment plan of $500 a month, and this was their response," according to the e-mail sent to the chairman. "We are wondering what our options are at this point."
Subsequent e-mails and internal letters indicate Royce Chigbrow and Sam Haws, another commissioner, agreed to the reduced payments. A March 4 e-mail from Haws suggests the chairman approved a letter to Cordell Chigbrow's client about the plan.
"Royce approved the letter. Thanks. Sam," according to Haws' e-mail.
Haws didn't respond to a request for comment.
Later in the month, when the taxpayer failed to pay other taxes, Tax Commission employees' e-mails indicate that they kept the chairman informed of efforts to address the situation.
On April 5, when the company still hadn't brought its payments current, a Tax Commission employee contemplated proceeding with a collection action.
"That's fine," wrote another in an e-mail reply. "Just let me know before anything goes out so I can give the Chairman a head's up."
Cordell Chigbrow told the AP he has never sought special treatment from the Tax Commission or his father. He said his firm only made the request through his father to make certain it was directed to the appropriate person.
"It's customary for CPA firms in the Treasure Valley or anywhere to request appeals with the tax commissioners," Cordell Chigbrow told the AP. "We're not requesting any special favors for our clients."
This wasn't the first time that his son's firm had used Royce Chigbrow as a conduit to seek help for its clients, e-mails show.
In November 2007, Chigbrow, Ryan and Co. — which Royce Chigbrow founded in 1985 — sent the chairman two e-mails asking him for help in waiving tax penalty payments of $931.20 and $644.04.
"Can you forward this request to someone in the appropriate department," the firm's e-mail requests at 10:51 a.m. Nov. 15.
Eight minutes later, Royce Chigbrow forwarded the message to an unidentified Tax Commission employee.
"Would you follow up on this," he asks.
A third e-mail from an employee shows the taxpayer received the abatement the next day.
Royce Chigbrow said he simply forwarded the e-mail, without advocating for penalty relief.
"I do not believe that, in forwarding matters to Tax Commission employees, I ever gave the impression that a Tax Commission employee should follow a particular course of action or that any taxpayer should be given any special consideration," he wrote the AP, defending his action. "If somehow a Tax Commission employee held such an impression, such was not my intent."
Ada County Prosecutor Greg Bower, who received the documents from the Idaho attorney general for review after the pending civil lawsuit was filed in June, concluded that they didn't merit a criminal investigation.
Ahead of the 2011 Legislature, some Idaho lawmakers are talking about reforming the four-member Tax Commission made up of two Democrats and two Republicans.
Royce Chigbrow has deep partisan ties, having been treasurer for Otter and other GOP campaigns.
"The department should be as free as possible from political influence," said Rep. Wendy Jaquet, D-Ketchum, who wants Idaho to adopt a system similar to neighboring Montana's, where a professional director runs the Department of Revenue and an independent board handles tax appeals.
In Idaho, the four commissioners run the agency and handle appeals by taxpayers who dispute their liabilities.
Idaho Senate President Pro Tempore Brent Hill hadn't reviewed the Tax Commission e-mails and said he has no evidence Chigbrow did anything wrong.
Two years ago, Hill, R-Rexburg, also investigated allegations made by a now-former Tax Commission auditor of improper settlements made in favor of influential taxpayers. Hill, an accountant, determined no laws had been broken, as did separate reviews by the Idaho attorney general's office and an accountant appointed by Gov. Otter.
Still, Hill said he's considering revamping the agency, too.
"If there's some way we can restructure it to improve the fairness of the ways the tax laws are being administered, or even the perception of fairness, we ought to do that," Hill said.
Copyright 2010 The Associated Press.