Posts tagged: tax liens
You can read my full story here at spokesman.com on the U.S. Justice Department's lawsuit against Idaho Rep. Phil Hart, which seeks to foreclose on his log home in Athol for more than half a million in back federal income taxes, penalties and interest. Through Oct. 31, 2011, the complaint says, Hart owes the IRS $549,703.48, for back taxes from 1996 to 2008.
Hart wasn't immediately available for comment. He's also fighting the Idaho State Tax Commission over more than $53,000 unpaid state income taxes, penalties and interest; though he's lost repeatedly, his appeal to the Idaho Supreme Court likely will come up for a hearing in April.
The federal complaint also asks the court to set aside the “fraudulent transfer” of the home to various parties including the trust, determine that the trust is a “sham entity,” and rule that “the United States has valid and subsisting federal tax liens on all property and rights belonging to Hart, whether real or personal, wherever located, and whether presently held or hereinafter acquired,” expressly including the Athol home. “The property shall be sold, and .. the proceeds from the sale shall be distributed in accordance with the court's findings,” the complaint states. It also asks that Hart be ordered to pay the federal government's court costs for bringing the case.
According to Kootenai County records, Hart's home, which sits on 10 acres, is only valued for tax purposes at $271,573.
The U.S. Department of Justice has filed suit against Idaho Rep. Phil Hart in federal court, seeking to foreclose on his Athol home for failure to pay back federal income taxes, penalties and interest. “Hart has neglected, failed, or refused to make full payment to the United States of the assessed amounts and the interest and penalties accrued thereon,” federal prosecutors wrote in their complaint against Hart, filed in federal court in Boise, seeking $550,000. The home is the log home that Hart built partly from timber he illegally logged from state school endowment land, for which he never fully satisfied a court judgment.
Hart, a tax protester, also is currently appealing back state income taxes and penalties to the Idaho Supreme Court. He was removed from the House Revenue & Taxation Committee and agreed to give up his vice-chairmanship of the House Transportation Committee after ethics complaints were filed against him over his tax issues, his use of his status as a legislator to seek delays in his state and federal tax cases, and the timber theft. Hart continues to serve as a state representative, a Republican representing District 3 in North Idaho.
Attorneys for the Idaho State Tax Commission have filed their response to Rep. Phil Hart's state income tax appeal to the Idaho Supreme Court, writing that Hart seems to be arguing different rules apply to him just because he's a state legislator. “Appellant appears to be arguing that his status as a legislator excuses him from the requirement to file a timely appeal,” the state attorneys wrote.
Hart, a tax protester who stopped filing both federal and state income tax returns for three years in the 1990s, 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 appealed five times. You can read my full story here at spokesman.com, and read the state's brief here. Hart now has another week to file his reply to the state's response, and then the case can be set for arguments before the Supreme Court, which likely won't happen before April of 2012.
Tax-protesting Idaho state Rep. Phil Hart is arguing that a district judge abused his discretion by refusing to delay a court hearing when the state representative was in Boise, debating legislation to permit guns on state college campuses that he strongly supported. Hart, R-Athol, devoted much of his opening brief in his appeal to the Idaho Supreme Court to arguments over how a Coeur d'Alene judge, John Mitchell, went ahead with a scheduled hearing in Hart's case on March 16 when the Idaho House was “debating a very important piece of legislation which my constituents most certainly expect, and would demand, that I be present to vote on.”
Hart, who is contesting an order to pay more than $53,000 in back state income taxes, penalties and interest from the tax years 1996 to 2004, disagreed with the court's ruling that the hearing - on Hart's own motion for reconsideration of Mitchell's order rejecting his case - merely consisted of legal arguments by the attorneys and didn't require Hart's presence, but that he could participate by phone if he chose to. He declined. State Tax Commission attorneys have cited “a pattern of delay and obstruction” in Hart's tax protests, and objected to any further delays. You can read my full story here at spokesman.com, along with a link to Hart's brief to the Idaho Supreme Court.
Phil Hart has filed a motion to disqualify the judge in his state income tax appeal case in 1st District Court in Kootenai County, Judge Lansing L. Haynes. Hart’s motion, filed late last week by his Coeur d’Alene attorney Starr Kelso, cites an Idaho court rule that permits a judge to be disqualified without cause; Kelso declined to comment on the motion, which could delay Hart’s case, now scheduled for a court hearing on Dec. 7 on the state’s motion to dismiss the appeal; you can read my full story here at spokesman.com.
Haynes has been a district judge since 2006, and was re-elected this year; prior to becoming a judge, he worked for the Kootenai County prosecuting attorney’s office for 18 years, where he was chief criminal deputy, specializing in major felony prosecutions and particularly crimes against children. Before he became a judge, Haynes served on the Kootenai County Republican Central Committee.
Hart, who just was re-elected to a fourth term in the state House of Representatives, is going to court to fight an order from the state Tax Commission to pay $53,523 in back state income taxes, penalties and interest. He first appealed to the state Board of Tax Appeals, but it rejected his appeal, saying it was filed too late - after the expiration of the 91-day appeal period.
Hart argued there, and is arguing again in his court appeal, that the state Constitution’s legislative privilege provision means he should have months longer to file his appeal, because the appeal period ended within 10 days of the start of the 2010 legislative session. The constitution protects state legislators from arrest or “any civil process” during legislative sessions or 10 days before they start. The state, in its motion to dismiss the court appeal, wrote, “Not being liable to any civil process does not mean that taxpayer is relieved from the operation of statutes of limitations. … The taxpayer, Phil Hart, is seeking to use his status as a legislator to relieve himself of having to comply with the statute of limitations set forth in Idaho Code.”
The state’s motion said, “In this case, the taxpayer is seeking to invoke the jurisdiction of this court and is not defending himself from civil process. It is the taxpayer who is filing this action.”
Idaho state Rep. Phil Hart is going to court over his back state income taxes, filing an appeal in 1st District Court in Kootenai County charging that Idaho’s state income tax is unconstitutional. Today, the state of Idaho filed a motion to dismiss the appeal; the court set a Dec. 7 hearing on the motion.
Hart’s seven-page appeal raises an array of issues, including whether Idaho’s state income tax “as a graduated tax, fails the uniformity requirement” of Idaho’s state Constitution; and whether the state Board of Tax Appeals, in Hart’s case, “upheld the sanctity” of Idaho’s constitutional privilege protecting state legislators from civil action during legislative sessions.
Those were among the issues Hart raised in appealing an order to pay $53,523 in back state income taxes, penalties and interest last spring, but the state Board of Tax Appeals rejected his appeal. It also rejected a motion for reconsideration Hart filed in September.
In late September, a special House Ethics Committee voted unanimously to recommend that Hart, a three-term Republican state representative from Athol, be removed from the House Revenue and Taxation Committee while he continues his personal fights against back state and federal income taxes. Hart refused to step down from the committee voluntarily, maintaining that he has no conflict of interest; House Speaker Lawerence Denney has said he’ll wait until after Tuesday’s election to decide whether to remove Hart from the panel. You can read my full story here at spokesman.com.
Former Idaho Rep. Bill Sali penned a “dear friend” letter that was distributed to all attendees at last night’s Kootenai County Republican Central Committee meeting, defending Rep. Phil Hart and pinpointing what he says is the real reason for Hart’s tax and legal troubles: Me. “Why has Phil gotten so much media attention?” Sali asks in the letter. “In the Legislature Phil has been an effective voice for freedom, less government and lower taxes. Apparently Betsy Russell can’t stand that and she wants to silence his voice. She wins if you decide not to support Phil.” You can read the letter here.
Today’s Coeur d’Alene Press reports that the Kootenai County Republican Central Committee will vote tonight on whether to remove their state committeeman for denouncing Rep. Phil Hart over his tax and legal troubles. “This vote is important, because it’s going to identify what the local party’s identity is. If they vote me out, it’s because a lot of people support what Phil Hart is about,” said Matt Roetter, a four-term committee member and two-term state committeeman. “This vote’s not really about me, it’s about Phil Hart.” Roetter said, “I won’t support a guy who has these issues surrounding him, because it’s not good for the Republican party. Character matters. Being honest matters.”
Others on the central committee said Hart is the party’s nominee and that’s that; he’s being challenged by another Republican, Howard Griffiths, in a write-in campaign. “I don’t care who it is. If the guy is elected through the primaries, that is the person we’re obligated to support,” said Vermont Trotter, precinct 60 committeeman. “It could be Bozo the Clown, for all I care. Not that Phil Hart is a bozo.” You can read the full story here, and here’s a link to yesterday’s Huckleberries post on the topic.
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.”
The Internal Revenue Service has filed another nearly $300,000 in tax liens against Idaho Rep. Phil Hart, R-Athol, bringing the total that public records show Hart owes in back taxes, interest and penalties to nearly a million dollars. The IRS filed two liens for $292,935 against Hart on Wednesday in Kootenai County, both targeting Hart as a nominee for the trust that owns his Athol home. All are for individual income taxes, penalties and interest from the tax years 1997 through 2003, plus 2006 and 2008. In addition, on Sept. 7, the federal tax agency filed another $3,906.86 in liens against the trust that owns Hart’s North Idaho engineering firm; those liens were for withholding taxes and corporate income taxes.
Hart said Friday that he was unaware of the additional liens until informed of them by a reporter. “I’m finding out about it for the first time,” he said. Asked why the IRS might be filing additional large liens against him now, Hart said, “Well, all I know is it’s the election season.” You can read my full story here at spokesman.com, and see the new liens here.
Remember when Rep. Phil Hart’s attorney, Starr Kelso, issued a statement last week charging that the House Ethics Committee’s action against Hart, through its unanimous vote to recommend his removal from the House Revenue & Taxation Committee while he presses his own personal fight against back state income taxes, had “no basis in law or procedure and exceeds the Committee’s authority”? Turns out those claims aren’t going anywhere. Here’s why: “There is no judicial review of this,” said Brian Kane, the deputy attorney general assigned to the Ethics Committee, who attended all its meetings and advised members throughout the process.
“This is a wholly internal procedure of a single chamber of Idaho’s Legislature,” Kane said. “Courts generally have been extremely resistant to getting into the inner workings of the legislative body, as far as committee assignments and things like that. That would be a really clear violation of the separation of powers, in my opinion.”
Kane outlined for the panel, at both its meetings, the options it had before it: Dismissal of charges, reprimand, censure, or expulsion. “Each of those are recommendations to the full body,” he said. “And they can include within those measures additional recommendations such as removal from a committee or removal from all committees, or different combinations of things that perhaps the speaker or the body would want to invoke against that member.”
BOISE, Idaho (AP) — House Speaker Lawerence Denney says it “might be the best” for a lawmaker embroiled in a $700,000 tax dispute to be stripped of his assignment on a key legislative tax committee. A seven-member House ethics panel voted Wednesday to recommend Rep. Phil Hart’s removal from the House Revenue and Taxation Committee. Denney told The Associated Press Thursday he won’t make a final decision until December. He first wants to sit down with Hart and discuss the matter. Still, Denney, a Republican from Midvale, said removing Hart from House Revenue and Taxation Committee “might be the best thing.” Before making their removal recommendation, a majority on the ethics committee concluded Hart’s votes didn’t violate conflict of interest rules, and dismissed a charge of abuse of legislative privilege; however, they said his continued service on the tax committee while he presses his personal tax fight did constitute a conflict of interest.
Idaho Rep. Phil Hart’s attorney, Starr Kelso, has sent out a defiant response to today’s House Ethics Committee decision on Hart’s behalf, arguing that the panel’s decision “has no basis in law or procedure and exceeds the committee’s authority.” That’s not what the Idaho Attorney General’s office advised the ethics committee. You can read Kelso’s statement here; headed, “Phil Hart’s Response to the Idaho Ethics Committee Rulings,” declares, “Since January 2005 Mr. Hart has paid over $120,000 in txes. Mr. Hart believes that when the law is applied to the facts it will be determined that he has overpaid his income taxes.”
Public records, including IRS liens, show that Hart owes $700,000 in back federal and state income taxes, penalties and interest. In a motion for reconsideration to the state Board of Tax Appeals that Kelso provided to the Ethics Committee on Wednesday, he wrote that Hart’s tax woes are “entirely the result of political persecution of Mr. Hart by the IRS.”
Rep. Tom Loertscher, R-Iona, chairman of the special House Ethics Committee, said after the panel’s meeting today that he’s wondered why Hart delayed so long to file a state tax appeal that was due in December - he waited until March 31st - but decided “it’s immaterial.” He added, “That’s not the way I would do business.”
Hart claimed legislative privilege allowed him the delay, but the state Board of Tax Appeals said even if that did apply, he’d still missed the deadline. Loertscher said that left the ethics panel without guidance on the privilege issue. “I’ve thought about this and agonized about it a lot,” Loertscher said. “It’s a hard process. … No matter how bad it looks, he hasn’t violated the rule as determined by the majority of this committee.”
Hart, who stopped filing both federal and state income taxes in the mid-1990s while he unsuccessfully pressed a lawsuit claiming that the federal income tax is unconstitutional, owes nearly $700,000 in back state and federal taxes, penalties and interest, according to public records. He was running unopposed for re-election in November until Hayden Lake businessman Howard Griffiths decided to run against him as a write-in because of his tax woes.
Loertscher said, “I think he’s got enough constituents up there - write the other guy in if they don’t approve of what he’s done.”
Here’s a link to my full story at spokesman.com on the House Ethics Committee hearing today, in which the panel voted unanimously to recommend that Rep. Phil Hart, R-Athol, be removed from the House Revenue & Taxation Committee while he presses his own personal fight against back state income taxes.
That vote was unanimous, but Rep. George Sayler, D-Coeur d’Alene, voted with the panel’s Republican members in an earlier 5-2 vote to dismiss a charge against Hart of abuse of legislative privilege. “I’ve said before I don’t think this is a partisan issue,” Sayler said. “I don’t see that we had a clear standard to judge by, in terms of the immunity clause … when it can be used and when it cannot be used. I certainly thought it was inappropriate, and cast a black mark on the legislative body, and I would hope that Rep. Hart would change his practice, but in terms of a clear violation of that clause, I didn’t see it.”
Sayler said, “From a personal perspective, I do believe his behavior was unethical. But from a legal perspective, I didn’t see we had the justification.”
Rep. Dell Raybould then moved that the Ethics Committee recommend to the speaker to remove Rep. Hart from the House Revenue & Taxation Committee. Rep. George Sayler seconded the motion, and it passed unanimously.
Rep. Dell Raybould has moved to dismiss the complaint against Rep. Hart for abuse of legislative privilege. Rep. Rich Wills seconded the motion, and it passed on a 5-2 vote. Rep. George Sayler, D-Coeur d’Alene, joined the panel’s Republicans in that vote. Now the committee is moving on to consideration of Hart’s membership on the Rev & Tax Committee.
Rep. Wendy Jaquet said Hart can talk to the speaker and his fellow committee members any time. “I don’t think the people would be very satisfied with that answer,” she said. Chairman Tom Loertscher said, “If he chooses not to resign (from the House Rev & Tax Committee) at this point, then we will discuss that matter.” Kelso responded that in his view, the only issue before the committee is “whether or not there was a violation of ethics by the assertion of a constitutional provision. … I’m just clarifying the issue, that’s the issue,” Kelso said.
“It seems to me that his continued presence there is problematic,” said Rep. George Sayler, D-Coeur d’Alene, noting that the committee’s original charge included the option of recommending that Hart be removed from the tax committee.
Rep. Phil Hart is refusing to resign from the House Rev & Tax Committee. “I am authorized on behalf of Rep. Hart to state that regardless of which direction the vote of the Ethics Committee goes, he will speak and discuss this issue with the speaker of the House and the committee membership,” his attorney, Starr Kelso, told the Ethics Committee. Rep. Wendy Jaquet tried to ask Hart a question about that, but Hart won’t answer; Kelso is speaking for him.
The House Ethics Committee is taking a 15-minute recess, at the suggestion of Rep. Dell Raybould, “to see whether or not Rep. Hart would prefer to resign from the Rev and Tax Committee while this process with the Tax Commission is going on, so that there isn’t any conflict.” Raybould said, “If he would voluntarily do that, why then I think this issue would be completely resolved … for now.” The committee then voted unanimously to take the 15-minute break.