Posts tagged: state income tax
“We have before us a copy of the minutes of our last meeting,” Rep. Tom Loertscher said as the ethics committee came back into session. “On page 6, on the last page, Rep. Raybould moved that the committee dismiss the complaint of misuse of constitutional immunity by Rep. Hart, Rep. Wills seconded the motion, that motion passed 5 ayes and 2 nays. So we have dealt with this issue and brought it to a conclusion at that point in time.”
Rep. Bert Stevenson then made a motion to direct the committee’s staff and Deputy Attorney General Brian Kane to do “further investigation into these issues” and how they affect the “status of the Legislature and reflection on the Legislature.” He said, “I would move that we continue this hearing to a further date and instruct Mr. Kane to do that investigation that would be necessary, to the issue of the timber sales as well as other issues that Mr. Kane might feel appropriate to bring forth.” Rep. Rich Wills, R-Glenns Ferry, asked to include in the motion asking Kane to prepare an Attorney General’s opinion on the foundation of the claims in the ethics complaint. Rep. Wendy Jaquet, D-Ketchum, asked to also include a review by the Attorney General’s office of the House ethics rules, and whether items not specifically delineated in the complaint can be examined by the ethics committee.
During the Ethics Committee’s break, over the speaker system is coming a muffled conversation by Rep. Phil Hart, talking at his lawyer’s office, and strains of music.
Rep. Eric Anderson said children have asked him how the courts could repeatedly say Hart was wrong, but he could continue to say he’s right. Rep. Tom Loertscher, Ethics committee chairman, asked Anderson, “Is Rep. Hart denied the opportunity to challenge … in any court … the same as any other citizen would have - does he have that right or did he give that up as a representative?” Anderson responded, “I’ve never implied that he does not have that right. It’s not in my complaint.” Loertscher said, “The only way that he could be in violation of these ethics rules is if he used his office to escape these responsibilities. … If there’s evidence of that, I think that we should proceed.” But Loertscher said he thought the ethics committee already had resolved that there was no such evidence with regard to the tax issues.
Rep. Bill Killen, D-Boise, took issue with that. Earlier, the panel refrained from dealing with Hart’s legislative privilege claim in his state income tax appeal because the appeal was pending, Killen said, but that’s since been decided, both by the state Board of Tax Appeals and the District Court. Both ruled against Hart. Killen said it’s time for the ethics panel to look at that issue. Loertscher disagreed, and said the committee decided “that he hadn’t abused that.” He said, “That’s what we decided at our final meeting.” Now, the panel has taken a brief break to review its minutes.
Rep. Eric Anderson, R-Priest Lake, told the House Ethics Committee, “It could be an array of things that cause ethics issues to rise up. … I don’t know why we have an oath if it’s not going to be enforced.” He said he believes Hart has violated his oath of office. “I take that very serious when I raise my hand to swear on upholding the constitution of both the state and the federal government, I think that we all should and most of us do. But it is a reflection when we are doing things that are inappropriate, we have … diminished that oath. When one person, one part diminishes it, I think it’s diminished for all.”
Anderson noted that Hart has gone through numerous court proceedings on his claims, all unsuccessful. “There have not been any of these proceedings that have been favorable in terms of Rep. Hart, but yet he still continually as a legislator says that he’s done no wrong,” he said.
Rep. Tom Loertscher, R-Iona, said after reviewing Rep. Eric Anderson’s complaint, there was no mention in it of the silver issue. Therefore, he said, he apologized to the committee and it shouldn’t even be discussing it. Rep. Wendy Jaquet, D-Ketchum, asked if under state laws and House rules, “If it’s not listed in the complaint, that we can’t talk about it?” In response, Loertscher asked Legislative Services Director Jeff Youtz to read the ethics committee rules. He did so. They make no specific mention of that question.
Loertscher said if items not specifically mentioned in the complaint can be brought up, “Then we could probably open this up to almost any action of any legislator at any time - do we really want to go there?” Jaquet asked Rep. Eric Anderson, R-Priest Lake, to comment; he’s doing so now. “The intent there was to show that there is a pattern of behavior,” Anderson told the panel.
A half-dozen Hart supporters in the audience, who are wearing white paper cut-out hearts in support of Phil Hart, are grumbling loudly, “This is a circus” and other complaints about the Ethics Committee proceedings.
Rep. Dell Raybould, R-Rexburg, said if the Ethics Committee is going to proceed further “on this silver coin issue,” it needs a lot more information about the organization, the bill Hart introduced in 2010, and more. He said he didn’t think that was what the panel was gathered for today. Said Rep. Tom Loertscher, R-Iona, “I think we did resolve that issue already as to whether or not he was in violation of House Rule 38 in not disclosing to the body that he had some affiliation, because as he stated here today, he didn’t have that affiliation.”
Rep. Wendy Jaquet, D-Ketchum, responded, “He did take an oath to uphold the laws of the state and the constitution of the United States and the state.” She said Hart’s involvement in the alternative currency movement suggested his bill might have been related to that, not just to promoting an Idaho commodity. “Should that bill have even been brought?” she asked. “There is some additional information that is murky.”
After Rep. Bill Killen, D-Boise, pressed repeatedly, attorney Starr Kelso finally conferred with his client, Rep. Phil Hart, and said Hart was not involved with the NORFED Liberty Dollars organization after 2006 or 2007. When he introduced legislation in 2010 regarding silver medallions as currency, Hart “had had no involvement with those folks at that time,” Kelso said.
Rep. Wendy Jaquet, D-Ketchum, asked whether Hart had proper permits to sell NORFED or Liberty Dollars. Starr Kelso responded, “That issue, to the extent it was raised, was discussed in the original hearing.” He said the question of whether Hart paid sales taxes on the Liberty Dollars he sold is “just an incredible fishing expedition - what does that have to do with anything?” he asked. The Liberty Dollars were an alternate currency minted from silver that were promoted as legal tender; an FBI raid put a stop to the operation in 2007, which was deemed illegal. Kelso said Hart was no longer involved with the group when he introduced a silver currency bill in 2010.
“What I’m trying to figure out is the role that Rep. Hart played in that organization in 2007, and why he chose to bring legislation in 2010,” Jaquet said. “We talked about whether he had a personal benefit. You said that he did not have any share in that company any longer. I’m confused about the role that he played … I did not know that he was a ‘regional currency officer’ (for the group), and if he was still a regional currency officer when he brought that legislation.”
Rep. Bill Killen, D-Boise, said he wanted to hear from Hart himself on that question, but Hart isn’t answering any questions, leaving that to Kelso.
After Rep. Wendy Jaquet, D-Ketchum, said of the timber issue, “I believe that there’s some merit there, that we should look into this further,” Ethics Committee Chair Tom Loertscher R-Iona, said, “The thing we should consider is if Rep. Hart used his office as a means of not paying that obligation. That would be a violation of the ethics rules of the House.” If not, he said, that would “not seem to be a topic that is appropriate for an ethics hearing. … If he’s used his office to say, ‘You can’t touch me because I’m a legislator’ … I don’t believe that anything in the record indicates that that’s the case.”
Jaquet said she wondered whether the reason that the state Department of Lands dropped the ball on collecting its judgment against Hart was because he was a legislator. She said the panel should at least look into that question.
Chairman Tom Loertscher, R-Iona, said there are three points in the ethics complaint: Theft of logs from state endowment lands, claiming that state and federal income taxes are unconstitutional, and personally benefiting from silver legislation. “We dealt in our last meetings about these items having to do with taxes,” Loertscher said. “We have disposed of those.” Rep. Bill Killen, D-Boise, said, however, that he’s had “an opportunity to revisit the law” since then. Killen, an attorney, said, he discovered a section of law that “makes it a misdemeanor, makes it a crime to willfully fail to pay your taxes.” He said, “Based on that, I think that we should proceed further down the road on this. It seems, regardless of the rationale, regardless of what personal subjective beliefs of Mr. Hart, what he’s engaged in is flatly against the law in the state of Idaho, and I think should be engaged in beyond this hearing.”
Rep. Wendy Jaquet, D-Ketchum, noted that Hart came to the Legislature in 2004 with an outstanding judgment against him for the 1996 timber theft, which he didn’t pay.
Ethics Committee Chairman Tom Loertscher, R-Iona, opened the ethics committee hearing this morning saying, “The purpose of our meeting today is to make a determination as to whether or not there is merit enough on this complaint to go further. This is not a hearing into the matter in any way.” Hart is participating by phone, but when asked if he was on the line, his attorney, Starr Kelso, answered for him.
This morning’s House Ethics Committee meeting will be broadcast live on the Internet; you can listen in by going to the Legislature’s website and clicking on the link under “Announcements.”
Rep. Phil Hart, R-Athol, has submitted letters of support from GOP central committees in Boundary, Bonner and Benewah counties, saying he should be cleared of all ethics charges. “We know that Representative Hart received 75.2 percent of his district’s vote and this was after the people already knew about his problems with the IRS and Tax Commission,” wrote Pamela Kaynor, Benewah County GOP chairman. The committee also received several emails and letters from Hart supporters, several of them identical. W.L. Leiby of Coeur d’Alene wrote in a Dec. 9 letter, “What is the problem here? Is it that rep. Hart supported and was supported by the tea-party? Is it that he supported staunch new conservatives against tired old dead-wood? Why is it Rep. Hart is being persecuted by the establishment?”
According to public records including IRS liens and court documents, Hart owes more than $500,000 in back state and federal income taxes, penalties and interest. He also has an outstanding judgment for thousands of dollars stemming from a 1996 timber theft on state endowment lands that he unsuccessfully defended in court.
Rep. Eric Anderson, R-Priest Lake, who filed an ethics complaint against Rep. Phil Hart, R-Athol, that’s the topic of a House Ethics Committee hearing later this morning, says Hart confronted him over it during the Dec. 2 organizational session of the Legislature, and Anderson subsequently was punished in his committee assignments, losing the vice-chairmanship of the House State Affairs Committee and being denied a third committee assignment he’d requested, on the judiciary committee. “They made this very personal with me,” Anderson said.
“He confronted me, right coming out of the chambers, right there at those doors where you come out of the (House) chambers,” Anderson said. He said Hart told him “that he’s been cleared of all these things, it’s ridiculous that I’m doing it, and no one is that pure.” He responded, he said, by asking about Hart allies who’ve been looking into Anderson’s record with a state milfoil fund and checking into his service on a local utility board. “He says, ‘There’s people watching you all over,’” Anderson said.
The House Ethics Committee meets at 11 a.m. today for its initial meeting in response to Anderson’s ethics complaint against Hart, which alleges that Hart has violated his oath of office by fighting against paying his state and federal income taxes and declaring that they’re unconstitutional; by invoking legislative privilege to try to win delays in his state and federal tax fights; and by illegally cutting logs from state school endowment land and using them to build his log home in Athol in 1996, and never paying an outstanding judgment over the theft.
Last Thursday, a Kootenai County judge tossed out Hart’s appeal of a state Tax Commission order to pay $53,000 in back state income taxes, penalties and interest, calling Hart’s arguments “wholly unsupported,” “unthinkable,” and, in his arguments that an Arizona case showed legislative privilege should exempt him from time limits to file his state tax appeal, making an “attempt to deceive this Court.” Hart said last week he hasn’t yet decided whether to appeal again.
Here’s a link to our full story at spokesman.com on today’s 1st District Court decision tossing out Rep. Phil Hart’s state income tax appeal. Hart, a tax protester who owes more than $53,000 in back state income taxes, penalties and interest - and hundreds of thousands in back federal income taxes, penalties and interest, according to public records including IRS tax liens - made arguments in his appeal that 1st District Judge John Mitchell dubbed “unthinkable” and “wholly unsupported.” Reporter Alison Boggs covered the hearing and has the full report; Hart told her today he could not comment because he had not seen the ruling and had not decided whether he would appeal it.
Tax-protesting state Rep. Phil Hart, R-Athol, today lost his attempt in 1st District Court to appeal a state Tax Commission order that he pay $53,000 in back state income taxes, penalties and interest. In a sharply worded decision, District Judge John Mitchell granted the state’s motion to dismiss Hart’s appeal, and said Hart’s claim “lacks any cogent legal argument.”
The state Board of Tax Appeals tossed out Hart’s belated attempt to appeal the order to pay the back taxes because he filed it months after the expiration of the 91-day appeal period; Hart argued that his status as a state legislator should make him exempt from the time limits, because the appeal period ran out shortly before the start of the 2010 legislative session. When Hart asked the Board of Tax Appeals to reconsider, it said that even if his argument about legislative privilege was correct, he still filed too late - and also paid a required fee too late.
Judge Mitchell agreed, and also noted that legislative privilege as applied in an Arizona case that Hart cited clearly would not apply to Hart’s appeal. In this case, the judge said, it was Hart himself who left the Board of Tax Appeals and the district court without jurisdiction to take up his appeal - because it was he who filed far too late. Hart also argued in his appeal that Idaho’s state income tax is unconstitutional; today’s decision doesn’t address that argument because it tosses out the whole case. You can read the judge’s ruling here.
Embattled Rep. Phil Hart, R-Athol, headed to court in Coeur d’Alene today to try to appeal the state Board of Tax Appeals’ decision to reject his state income tax appeal; he faces an order from the state Tax Commission to pay $53,523 in back state income taxes, penalties and interest. The state filed a motion to dismiss Hart’s appeal, arguing that the court has no jurisdiction to take an appeal because Hart missed the filing deadline, by many months, to file an administrative appeal. That’s what the Board of Tax Appeals ruled. Hart contends that as a state legislator, he should’ve had months longer to file, but the board ruled that even if his claims about legislative privilege were correct, he still filed too late. He also argued in his appeal that Idaho’s state income tax is unconstitutional.
1st District Judge John Mitchell took arguments from both sides on the motion to dismiss today, and took the case under advisement; he indicated he may rule as soon as tomorrow.
House Speaker Lawerence Denney’s announcement of his decision to remove Rep. Phil Hart from the House Tax Committee says he made the decision because Hart himself, in an Oct. 29 letter, asked him to do so. “Representative Hart was duly elected by the people in his district to represent them in Boise,” Denney said in his announcement. “Phil’s one of the hardest-working members of the House and, I believe, he’ll continue to be responsive to his constituents while serving on another committee.”
Hart, in his Oct. 29 letter to Denney, said it was “with real sadness” that he asked for a different committee assignment. “I continue in my passionate belief that we must fight the over-reach of government through its power to tax,” Hart wrote. “However, the developments of the past several months have created a rather toxic environment for me and members of the House. I fear that my continued service on this committee would only serve to provide fodder to members of the media and my political opponents.”
Denney also said in his announcement that he’ll appoint a new ethics committee to look into Hart’s conduct “as soon as possible.” You can read both Denney’s announcement and Hart’s letter here, and my full story here. Also, you can read a statement from Hart here, issued this evening, saying he voluntarily stepped down from the tax committee and that his move “precludes any action by Denney” to remove him.
House Majority Caucus Chair Ken Roberts, R-Donnelly, had this response to today’s announcement from House Speaker Lawerence Denney that Rep. Phil Hart will be removed from the House tax committee and a new ethics committee will be appointed: “I think it was important to have some action taken, especially on the previous ethics panel recommendations. I was glad to see the speaker take action on that. He’s pretty much required by the rules of the House to get another ethics panel together. … That’s the place for it to play out.”
Roberts said Hart’s case was a topic of discussion during the North Idaho Chamber of Commerce’s legislative tour, which drew dozens of lawmakers to a series of events and presentations in the Panhandle Sunday through today and included a banquet and speech from Gov. Butch Otter last night; Hart attended the banquet, but was missing from most of the tour. “There’s been some discussion about it, sure,” Roberts said. “I think people were looking for a decision by the speaker.”
Rep. Wendy Jaquet, D-Ketchum, who served as vice-chair of the House Ethics Committee that voted unanimously in September to recommend that Rep. Phil Hart be removed from the House tax committee, had this response to Speaker Lawerence Denney’s announcement today of Hart’s removal from the panel: “I think he should’ve done it right away. Why did he wait so long? … I think he sent a message that it probably wasn’t as important as maybe those of us who are on the committee thought it was.”
Jaquet said the same lawmakers likely will serve on the new ethics committee to investigate Hart in response to a complaint from Rep. Eric Anderson, R-Priest Lake, but one change on the Democratic side is that Rep. George Sayler, D-Coeur d’Alene, retired, so another member of the House minority will replace him.
Jaquet said she wasn’t surprised at the new allegations from Anderson about Hart, a tax protester who’s waging a fight against back state and federal income taxes and who illegally logged state school endowment land in 1996 for logs to build his Athol home. “What I was concerned about all along was how he was tarnishing the reputation of all legislators,” Jaquet said. “I think if he would resign, that would be an appropriate thing to do - resign before we have to convene an ethics committee.”