The IRS has reversed itself and now says the new liens it filed last week against tax-protesting Idaho Rep. Phil Hart as a nominee of a trust could duplicate other liens it earlier filed against Hart personally; it’s a nearly half-million-dollar difference when it comes to total tax debt for Hart, who maintains his decade-and-a-half fight with the IRS is the result of political persecution. You can read my full story here at spokesman.com. Today’s IRS comments were the opposite of what the agency said on Friday, when IRS spokeswoman Karen Connelly said the IRS typically won’t file duplicate liens for the same tax debt, and said, “No, generally speaking, you add them together, because otherwise, it’s sort of like double jeopardy. If it’s an individual plus a nominee on a trust, usually those two amounts would be for two separate tax issues.”
Today, Connelly said she’d been mistaken. “Apparently nominee liens can and often do cover the same tax debt as individual liens,” she said. Here’s why it makes a difference: A line-by-line comparison of liens the IRS has filed against Hart and those it’s filed against him as a nominee of the trust that owns his Athol home shows that virtually all of the liens against the house trust duplicate some, though not all, of the liens against Hart himself. That means Hart’s total tax debt to the IRS, as identified in liens that are public record, should be reduced from $941,347.90 to $493,088.91. That includes the $471,269.79 the IRS has filed in liens against Hart personally, plus the $21,819.12 in liens it’s filed against another trust Hart set up as owner of his Hayden engineering firm; those liens are for business taxes and do not duplicate the other liens. When his state income tax debt of $53,523, an amount he’s still attempting to appeal, is added to the total, it brings Hart’s total state and federal tax debt for back taxes, penalties and interest to $546,611.91.
So what’s the significance of the new liens filed last week? They show the agency is still going after Hart, though he contends he’s paid thousands in taxes in the past five years and is in negotiations with the IRS about the remaining amounts he owes. Hart said Friday that he didn’t want to discuss those negotiations, but that they’re still ongoing. Interestingly, the liens the IRS has filed against the trust that owns Hart’s home now total $448,258.99 - far more than the assessed value of the home, which according to Kootenai County records is just $271,573.
The IRS doesn’t comment on individual taxpayers’ cases, but Connelly said she wanted to “set the record straight” about her earlier comments on duplicate liens. “The IRS nominee lien secures the government’s interest in property that a taxpayer transfers to a nominee entity,” she said. “We file a ‘regular’ tax lien and also a nominee lien for the same tax years. In essence, it can be construed as a duplicate lien. We need it to ensure creditors understand the IRS has a lien interest in the property that is titled to a nominee.”