Democratic gubernatorial hopeful Keith Allred's plan to audit tax deals between the Idaho Tax Commission and those protesting their payments has been endorsed by the state Senate's tax committee leader. Sen. Brent Hill, a Rexburg Republican who heads the Local Government and Taxation panel, told the AP that Allred's proposal would boost public confidence in the tax system's fairness while protecting taxpayer privacy; click below to read the full story from AP reporter John Miller.

Allred floats plan to audit Idaho Tax Commission
By JOHN MILLER, Associated Press Writer

BOISE, Idaho (AP) — Democratic gubernatorial hopeful Keith Allred's plan to audit tax deals between the Idaho Tax Commission and those protesting their payments has been endorsed by the state Senate's tax committee leader.

Sen. Brent Hill, a Rexburg Republican who heads the Local Government and Taxation panel, said Allred's proposal would boost public confidence in the tax system's fairness while protecting taxpayer privacy.

Allred floated the idea Thursday on the Capitol steps in Boise, adding he believes a Democratic lawmaker's lawsuit against the Tax Commission alleging improprieties is unlikely to succeed — and is the wrong way to enact good policy.

He said an audit panel, created with or without help of the Legislature, would clear up the public's "cloud of doubt" over whether taxpayers with political clout get special treatment.

"I think probably what we're going to find is there is not a difference" in how the commission treats taxpayers, Allred said. "That's the most important reason to do this."

Rep. Shirley Ringo, D-Moscow, and former Idaho Supreme Court Justice Robert Huntley in June filed a lawsuit in 4th District Court, accusing the four-member Tax Commission of concocting secret tax deals handing wealthy residents millions.

Allred doubts Huntley and Ringo will win.

"I'd be surprised if the current lawsuit reveals any violations of the current law," he said.

Hill, also deeply skeptical of the lawsuit, said Allred told him Wednesday about his audit plan.

While he supports Otter in the chief executive's race, Hill called Allred's approach "a great idea."

"Audits are there to protect the innocent, as well as to discover any appropriate actions," Hill said. "If we can save the citizens some money by not having to defend unjustified lawsuits, if we can boost transparency and nurture public confidence, I think that's a good thing for everybody."

A Tax Commission spokeswoman didn't return a phone call.

Allred also called for the review and repeal of many of roughly $1.7 billion worth of tax exemptions the Legislature has added since 1965 to help everyone from mortuaries and ski-resort operators. Lawmakers have long studied exemptions but failed to dump them amid fierce opposition from beneficiaries.

Allred also criticized Otter for not collecting a bigger share of Idaho's estimated $250 million "tax gap" that goes uncollected annually through cheating or taxpayer ignorance. Had Otter hired more collection staff since he took office in 2007, Allred believes Idaho could have significantly reduced this year's $128 million cut to public education.

Otter was out of the governor's office Thursday. His campaign director, Debbie Field, declined to comment on Allred's audit proposal, saying it was the first she'd heard of it.

But she said it's fine for Allred, a former Harvard University professor, to take potshots from the campaign trail, but that the governor has the actual responsibility of navigating Idaho through the economic downturn and accompanying plunge in tax revenue.

"It's easy to posture without reality," she said, adding Otter's four-year plan to bolster the Tax Commission's staff is well under way but demands strict return-on-investment criteria be met to show new personnel are bringing in enough cash to justify their jobs.

Since 2009, the commission has gotten about $2 million to hire 74 temporary auditors to go after tax cheats.

Otter recommended another $1.5 million this fiscal year to keep the auditors on board.

"You don't just throw the money out there and say, 'Do it,' " Field said. "You have to take it responsibly."

Copyright 2010 The Associated Press.