Posts tagged: tax liens
A bankruptcy judge has ordered a tax-protesting former Idaho state representative to submit to intense new scrutiny of his finances, something federal lawyers say is necessary to prevent him from hiding assets from creditors including the U.S. government, the AP reports. Phil Hart now must appear at a hearing May 20 in U.S. Bankruptcy Court in Coeur d'Alene, according to an order from Chief U.S. Bankruptcy Judge Terry Myers.
Hart, a Republican from Athol who lost his bid for re-election in the GOP primary last year, has been ordered by courts to pay the federal and state governments more than $600,000 in delinquent income taxes, interest and penalties. He filed for Chapter 7 bankruptcy protection in January after the U.S. government moved in 2011 to seize his log home in northern Idaho to satisfy debts; it was his third bankruptcy filing, after the first two were questioned as inappropriate and were either withdrawn or dismissed.
With his order, Myers is forcing Hart to submit to what's called a “Rule 2004 Examination,” a provision of bankruptcy law meant to untangle a debtor's murky finances; among other things, Hart must provide statements from every account he's controlled since 2011. Click below for a full report from Associated Press reporter John Miller. Hart told Miller, “My understanding is this is a normal process for a person going through bankruptcy.”
Here's a news item from the Associated Press: BOISE, Idaho (AP) — Government attorneys are asking a judge to rule in their favor in a federal tax case against ex-state Rep. Phil Hart and allow them to immediately foreclose on his northern Idaho log home. In a motion for summary judgment filed in federal court Friday, Assistant U.S. Attorney Kathryn Keneally said there are no disputes over the facts concerning 6 of the 13 years for which the government believes Hart owes back taxes, and so U.S. District Judge Edward Lodge should rule in the government's favor for that portion of the lawsuit. Hart stopped filing federal income tax returns in 1996 while he while he unsuccessfully sued over the constitutionality of the federal income tax. The Internal Revenue Service is seeking to collect more than $500,000 in taxes, penalties and interest. Click below for a full report from AP reporter Rebecca Boone.
A federal bankruptcy judge has dismissed former Idaho state Rep. Phil Hart’s second bankruptcy filing, opening the way for federal authorities to go after his log home in Athol for back federal income taxes, and for the state to launch collection efforts over his state tax debts. “We’re kind of in line behind the feds, and I’m not sure what’s going to be left,” said Bill von Tagen, deputy Idaho attorney general for the Tax Commission.
The federal foreclosure lawsuit already has geared back up; a federal judge issued an order today calling for Hart to submit to a deposition on Jan. 7 as part of the case. The tax-protesting four-term state lawmaker has been fighting court orders to pay more than $600,000 in back state and federal income taxes, penalties and interest; he’s lost repeated attempts to declare the taxes unconstitutional and to claim that legislative privilege should free him from some or all of his tax debts.
You can read my full story here at spokesman.com. In September, Hart sent the state Tax Commission a copy of a 63-page appeal to the U.S. Supreme Court, in which, acting as his own attorney, he argued that the Idaho Supreme Court wrongly dismissed his legislative privilege argument and improperly scheduled a hearing at a time when he couldn’t attend because he was serving in the Legislature. Though that arrived at the state Tax Commission on Sept. 17, shortly before the deadline for such a filing with the high court in Washington, D.C., the U.S. Supreme Court never received the filing, and the deadline passed. In that appeal, Hart wrote that he’s a victim of “political persecution.”
Tax-protesting former Idaho Rep. Phil Hart, R-Athol, is now proposing in bankruptcy court to pay just $106 a month for three years to satisfy more than $626,000 in debts, a total of $3,816 - less than a third of the amount he proposed paying in his earlier, dismissed bankruptcy filing. The debts include more than $564,000 in back federal income taxes, penalties and interest, and more than $62,000 in back state income taxes, penalties, interest and court-ordered attorney fees and costs for the state. Hart appeared before a bankruptcy trustee Friday and refused to answer a barrage of questions.
Federal authorities have filed a foreclosure lawsuit seeking to take Hart's log home in Athol to satisfy his federal tax debts; that case was put on hold when Hart filed for bankruptcy in May, then started back up when his first bankruptcy filing was dismissed in August. Then, in October, Hart filed for bankruptcy again. Last week, a bankruptcy judge refused to postpone the foreclosure, finding that Hart had filed the second bankruptcy in bad faith. You can read a full report here from S-R reporter Scott Maben in Coeur d'Alene.
State lawmaker and tax protester Rep. Phil Hart has filed for bankruptcy — again — prompting a federal tax foreclosure case against him to be put on hold. Click below for a full report from AP reporter Rebecca Boone. Hart's new bankruptcy filing comes almost two months after he voluntarily dropped his previous one, acknowledging it was improperly filed under Chapter 13 of federal bankruptcy laws. His new filing is under the same chapter with largely the same circumstances.
The Idaho Supreme Court has ordered tax-protesting Rep. Phil Hart, R-Athol, to pay the state $10,128 in attorney fees and costs for his unsuccessful state income tax appeal to the court, finalizing a decision it first issued in June. At that time, the court dismissed Hart's request to reconsider his appeal; ordered that its earlier April 2012 decision rejecting the appeal be complied with “forthwith;” and ordered Hart to pay the state's attorney fees and costs. That order was issued “subject to the automatic stay in Appellant's bankruptcy proceeding.” Hart had filed for bankruptcy, but has since voluntarily withdrawn that petition; his bankruptcy filing had prompted an automatic stay on other court cases involving his finances, including a federal foreclosure lawsuit seeking to foreclose on his Athol home for more than $500,000 in back federal income taxes, penalties and interest. That stay has now been lifted.
Hart repeatedly appealed an order to pay more than $53,000 in back state income taxes, penalties and interest; he has maintained that both state and federal income taxes are unconstitutional. In his appeal to the Idaho Supreme Court, he argued that his status as a state lawmaker should have entitled him through legislative privilege to more time to file his appeal after a 91-day appeal period had expired, because a legislative session followed the appeal period. The court disagreed, writing, “In this instance, Hart is just a taxpayer, with no greater privilege than his constituents.”
Hart lost his re-election bid in the May GOP primary, so he leaves office at the end of his current House term, his fourth. Bill von Tagen, deputy attorney general for the state Tax Commission, said Hart owes the state both for the attorney fees and the underlying tax liability, and the state will be “seeking to collect it if we can.” He added, “There's a lot of people in line ahead of us, unfortunately.”
Federal authorities are gearing back up their foreclosure lawsuit against tax-protesting Idaho Rep. Phil Hart, now that Hart's voluntarily dismissed his bankruptcy filing - which had placed an automatic stay on the foreclosure case. U.S. District Judge Edward Lodge has lifted the stay in the case that goes after Hart's log home in Athol, but at Hart's request, agreed to a delay until mid-November for the first discovery deadlines in the case, due to the unexpected illness of Hart's Kentucky attorney. U.S. Justice Department lawyers had asked for a deadline a month earlier.
In legal documents filed in federal court in Boise, Hart's lawyers wrote, “Hart has no objection to the lifting of the stay,” as long as the deadlines are pushed back. The lawyer's malady is described variously in the filing as “a sever staph infection” and as a “staff infection.” Hart filed his bankruptcy case in May, just 48 hours before he was scheduled to be deposed in the home-foreclosure case, which seeks to take his house to settle more than $500,000 in back federal income taxes, penalties and interest. You can read my full story here at spokesman.com.
Federal prosecutors are calling for Idaho Rep. Phil Hart's proposed bankruptcy plan to be dismissed, saying it's improper, it wouldn't appropriately satisfy his half-million-dollar federal income tax debt, and it relies on an income source that will disappear at the end of this year: His legislative salary. Hart, a tax protester and fourth-term state lawmaker, was defeated in the May GOP primary, so his legislative salary will end in December.
“Hart's plan is not feasible,” wrote U.S. Department of Justice attorney Adam Strait in legal arguments filed in federal Bankruptcy Court. Hart had proposed paying $200 a month for five years - a total of $12,000 - to get his entire debt of more than $600,000 discharged. Most of that debt is to the IRS; it also includes more than $50,000 in back state income taxes, penalties and interest, and $22,000 in credit card debt. The plan, Strait wrote, “fails to make adequate provision for paying the United States' priority income tax debts.”
Prosecutors also noted Hart's refusal to answer numerous questions about his assets during a bankruptcy proceeding last month, from the home where he lives to the car he drives - neither of which he acknowledges owning. You can read my full story here at spokesman.com.
State Rep. Phil Hart, R-Athol, refused to answer numerous questions about his finances in a meeting Friday with creditors in his bankruptcy case, a move attorneys called unprecedented and likely to imperil his case in court. An attorney with the U.S. Department of Justice and another representing the Idaho State Tax Commission grilled Hart about his business interests, income, assets and debts during a meeting conducted by the trustee in Hart’s Chapter 13 bankruptcy filing; Hart was questioned under oath in the session at the Coeur d'Alene federal courthouse.
Hart, a longtime tax protester who owes the IRS more than $550,000 and the state more than $50,000, said he thought many of the questions – including ones about corporations he helped set up and about the Athol house he lives in – were inappropriate or irrelevant to his bankruptcy filing. He repeatedly responded, “I decline to answer.”
Refusing to answer such questions is highly unusual in such a meeting, said Ford Elsaesser, a Sandpoint lawyer representing the trustee in the case. Elsaesser said he has conducted around 30,000 debtor-creditor meetings. “I’ve never had a debtor decline to answer the routine questions that were asked,” he said. “Refusals to answer are not likely to be looked upon favorably by the bankruptcy court.” You can read our full story here from S-R reporter Scott Maben at spokesman.com.
Outgoing Idaho state Rep. Phil Hart has filed a Chapter 13 bankruptcy plan in federal court that proposes that he pay $200 a month for five years - a total of $12,000 - to get his entire debt of more than $600,000 discharged. The vast majority of that debt is back federal income taxes, penalties and interest owed to the Internal Revenue Service; it also includes more than $50,000 in back state income taxes, penalties and interest owed to the Idaho State Tax Commission, along with $22,000 in credit card debt.
“Debtor will pay to the trustee for a term, not exceeding 60 months, the sum of $200 monthly,” the plan says. No other payments are proposed, though Hart does report that he anticipates income tax refunds over the next five years, and agrees to turn those over as well.
A Spokane bankruptcy attorney with expertise in Chapter 13 cases said it's “unlikely” that such a plan would be approved. “Generally, you don't get to discharge your tax debts,” said David Gardner, an attorney with Winston and Cashatt. Gardner said the plan likely will draw objections from both the bankruptcy trustee and the creditors - including the IRS - when it comes up for a hearing in August. “For that amount of cash, I would expect the IRS to be very involved,” he said. You can read my full story here at spokesman.com.
When the state of Idaho made out its paychecks for tax-protesting state Rep. Phil Hart twice a month for the past seven years, the money didn't go to Hart - it went straight to the IRS. That's what Hart reported in documents filed this week in his bankruptcy case, in which he lists more than $600,000 in debt, most of it to the IRS and the Idaho State Tax Commission. In his supporting documents seeking a Chapter 13 bankruptcy reorganization, Hart reported, “100 percent of Legislative pay garnished since 2005, $16,000 annually.”
Bruce Newcomb, who was Idaho's longest-serving House speaker, said he was troubled by the revelation. “Let's put it this way: I find it very odd,” he said. “A person has a right to protest their taxes. But this has been one of the more extreme endeavors I've ever seen in my life's experience.” Newcomb said he worries about the impact of the case on the institution of the House. “The general public is suspicious of politicians in general, and when something like this comes along, it only serves to confirm what some people think,” he said. You can read my full story here at spokesman.com.
The Idaho Supreme Court, without comment, has dismissed tax-protesting Idaho state Rep. Phil Hart's request to reconsider his state income tax appeal, in which he argued the court should have given more consideration to his legislative privilege argument. In a one-page ruling, the Supreme Court declared, “After due consideration, it is hereby ordered that Appellant's petition for rehearing be, and hereby is, denied.”
Hart appealed an order to pay more than $53,000 in back state income taxes, penalties and interest, but filed his appeal months after the 91-day appeal period had expired. He argued that because an Idaho legislative session fell just after the appeal period, his status as a lawmaker should entitle him to more time to file. The Idaho Supreme Court strongly disagreed, writing in its unanimous decision in April, “In this instance, Hart is just a taxpayer, with no greater privilege than his constituents.” You can read my full story here at spokesman.com.
Tax-protesting Idaho state Rep. Phil Hart is asking the Idaho Supreme Court to reconsider its dismissal of his state income tax appeal, saying the court should have given more consideration to his legislative privilege argument. Hart appealed an order to pay more than $53,000 in back state income taxes, penalties and interest, but filed his appeal months after the 91-day appeal period had expired. He argued that because an Idaho legislative session fell just after the appeal period, his status as a lawmaker should entitle him to more time to file.
The Idaho Supreme Court strongly disagreed, writing in its unanimous decision in April, “In this instance, Hart is just a taxpayer, with no greater privilege than his constituents.” Hart's bid for reconsideration argues that the framers of Idaho's Constitution “were intimately aware that their full attention, without any distraction of any nature, was required in order for them, and future legislators, to accomplish their work on behalf of the people.” You can read my full story here at spokesman.com.
Tax-protesting Idaho state Rep. Phil Hart, who lost his bid for a fifth term in the GOP primary two weeks ago, has filed for bankruptcy. In Hart's petition for Chapter 13 bankruptcy, he lists just three creditors: The IRS, the Idaho State Tax Commission, and Anderson & Krieger, a construction defect law firm in Sacramento, Calif.
Hart also is facing a foreclosure lawsuit from the U.S. Justice Department seeking to foreclose on his Athol home for more than $500,000 in back federal income taxes, penalties and interest, and a state order to pay more than $53,000 in back state income taxes, penalties and interest. Michael McFarland, Hart's Coeur d'Alene attorney in the bankruptcy proceeding, said, “I'm really not in a position to discuss details.”
Hart's filing doesn't list any debt amount, but that must be detailed in subsequent filings that the court has ordered him to make within 14 days; you can read our full story here at spokesman.com.
Idaho Rep. Phil Hart tonight issued a defiant press release after the Idaho Supreme Court unanimously rejected his state income tax appeal, saying he plans to continue to fight. “It is but another phase of my quest for justice,” Hart wrote in the release he posted on Facebook; you can click below to read it in full. He maintained, “I do not owe the State of Idaho any tax.”
A unanimous Idaho Supreme Court has rejected state Rep. Phil Hart's appeal of an order to pay more than $53,000 in back state income taxes, penalties and interest on grounds of legislative privilege; you can read my full story here at spokesman.com. In a seven-page opinion authored by Justice Jim Jones, the unanimous court held that the Idaho Constitution's legislative privilege clause from arrest or “civil process” during legislative sessions didn't protect Hart, or permit him to file his state tax appeal months later than anyone else would have been allowed to.
“Hart's untenable argument flows from his misunderstanding of the word 'process,'” Jones wrote. “In this case, Hart was not obligated to do anything but pay his taxes.” The state didn't try to “compel Hart’s appearance before a tribunal,” the court wrote. “No court sought to hold Hart responsible for a new legal obligation. No sheriff or other agent of the State sought to arrest Hart or compel him to appear anywhere or take any other action. In other words, no one tried to hold Hart liable to civil process. Rather, Hart sought to avail himself of … appeals procedures, which he had until January 4, 2010 to do. He missed that deadline by almost three months.”
Wrote the court, “In this instance, Hart is just a taxpayer, with no greater privilege than his constituents.”
The court also dismissed Hart's argument that 4th District Judge John Mitchell abused his discretion by refusing to delay a motion hearing when Hart was in Boise participating in a legislative debate; he wasn't required to attend the hearing. The high court wrote, “Hart's argument on this issue is devoid of reasoned analysis or relevant authority.”
The court awarded attorney fees and costs to the state. “Hart's position here is groundless,” Jones wrote.
Hart's first court appeal in his state income tax case charged that Idaho's state income tax is unconstitutional; that argument wasn't considered, because the appeal was thrown out for being filed too late. Hart, a tax protester who stopped filing both federal and state income tax returns for three years in the 1990s, while he pressed an unsuccessful lawsuit charging the federal income tax was unconstitutional, had 91 days to appeal his order to pay more than $53,000 in back state income taxes, penalties and interest for tax years 1996 to 2004, but instead waited more than six months, saying an intervening legislative session entitled him to more time. Because it was too late, his appeal was rejected, a decision he's now unsuccessfully appealed five times.
U.S. District Judge Edward Lodge today dismissed one of tax-protesting state Rep. Phil Hart's key defenses in the federal lawsuit seeking to foreclose on his Athol home: That he's protected by legislative immunity. “Defendant Hart can only raise a legislative immunity defense if it is available under federal law,” the judge wrote. “He has not done so here.” Hart was citing a provision from the Idaho Constitution.
Plus, Lodge wrote that legislative immunity under federal law covers only “legitimate legislative activity.” He wrote, “The claims raised in this case are in regard to Defendant Hart's private actions in allegedly failing to pay his federal income taxes.”
The U.S. Department of Justice filed a motion to dismiss Hart's immunity defense; Lodge granted it. “Granting the motion in this case will avoid the expenditure of time and money that must arise from litigating spurious issues,” the judge wrote, adding that Hart's immunity claim “clearly lacks merit under any set of facts that he might allege.” You can read the judge's decision here, and our full story here at spokesman.com, from reporter Tom Clouse.
By the way, tax-protesting Idaho State Rep. Phil Hart, R-Athol, takes his appeal of his state income taxes to the Idaho Supreme Court today; the arguments start at 11:10 a.m. Pacific time in the old courthouse in Coeur d'Alene, second floor, Judge Luster's courtroom. S-R reporter Tom Clouse is there and we'll have a full report.
Tax-protesting Idaho state Rep. Phil Hart has cited his status as a state legislator numerous times in seeking delays in his court fights over paying back state and federal income taxes, pointing to the state constitution’s clause protecting lawmakers from civil actions during sessions. Now he’s using it as an argument for dismissing a federal lawsuit to foreclose on his Athol home for back federal taxes. In Hart’s reply to the federal lawsuit, in which the Department of Justice is seeking to foreclose on the home to pay off more than a half-million dollars in back taxes, interest and penalties, his attorney charged that the IRS claim is “barred” because a “notice of deficiency” was sent to Hart while the Legislature was in session. The IRS wants to sell Hart's log home in Athol and use the proceeds to offset more than half a million dollars in back taxes, penalties and interest; you can read my full Sunday column here.
Tax-protesting Idaho state Rep. Phil Hart has asked for and received a 30-day delay in the deadline to file his legal response to federal authorities' move to foreclose on his Athol, Idaho home for years of unpaid federal income taxes, interest and penalties. Hart, acting as his own attorney, asked for a delay until Jan. 5, which is four days before the start of this year's legislative session, to allow him time to bring on and qualify an out-of-state attorney and get him up to speed to file the response.
“Defendant Hart states that the purpose of the continuance is not for delay, but it is needed for him to obtain counsel and allow said counsel to be admitted … and review the case in preparation for filing an Answer,” Hart wrote in his motion to the federal court. Justice Department attorneys raised no objection, and U.S. District Judge Edward Lodge granted Hart a delay to Jan. 5.
Now, Hart has filed to have Kentucky attorney Charles E. McFarland represent him in the case. McFarland represented excavation business owner and tax protester Fred Allnutt Sr. of Ellicott City, Maryland, in an unsuccessful appeal to the 4th Circuit U.S. Court of Appeals in 2008, charging that a statute of limitations should bar an IRS notice of deficiency ordering Allnut to pay $2 million; the appellate court rejected the appeal.
The U.S. Department of Justice says Hart owes $549,703.48 to the IRS as of Oct. 31, for back income taxes, interest and penalties. It's filed in federal court to foreclose on his Athol home to satisfy the debt. The log home, ironically, was built partly from timber Hart illegally logged from state school endowment land in 1996, for which he never fully satisfied a court judgment. Hart, a Republican, is in his fourth term in the House.