Hart tax case tests privilege
Exemption while in session applies to IRS process, Idaho legislator says
BOISE – Idaho state Rep. Phil Hart’s current dispute over state income taxes isn’t the first time he’s invoked his status as a state legislator to hold off the tax man: Hart has sought delays from the IRS and the state Tax Commission four times in the six years he’s served as a state lawmaker.
Hart is arguing that he should be able to appeal an order to pay $53,000 in back state income taxes, penalties and interest after the deadline has passed because as a state legislator, he’s entitled to extra time when the Legislature is in session.
Washington has a legislative privilege clause in its state constitution that’s very similar to the one Hart cites in Idaho’s constitution. However, Hugh Spitzer, who teaches state constitutional law at the University of Washington School of Law, said he hasn’t heard of lawmakers invoking it in similar situations.
“The reason for these provisions, which are very common not only in the United States but throughout the world, is to protect elected legislators from harassment by their opponents,” Spitzer said. “It became very important in England in the 17th century … because the kings would try to shut down parliament, arrest members of parliament with whom the king disagreed.”
But, he said, it’s one thing to say the government can’t arrest you and “another thing to say that this somehow frees you up from procedural requirements of litigation in which you are already involved.”
In Hart’s case, his 91-day appeal period was within days of running out when he declared that the Legislature would convene its session in 10 days, so he had until spring to file his appeal. The state Tax Commission disagrees and has moved to dismiss his appeal.
In 2006, as a lawmaker with just one session under his belt, Hart came to Boise for a one-day special session called by then-Gov. Jim Risch. While Hart was in the state Capitol, an IRS employee snagged him and served him with a document subpoena.
“They just caught me in the building. It was a surprise,” Hart said.
He protested, citing the state Constitution’s protection of lawmakers from civil process while in session. The IRS served him with the same summons again in November 2006 during a face-to-face meeting. Hart said he took that as a sign he’d won on the civil process question.
Then, in January 2008, the Internal Revenue Service mailed a notice of deficiency on income taxes to Hart during the first week of the month. “The legislative session commenced January 7 of that year and continued for approximately three months,” according to a letter Hart requested from a Spokane attorney and submitted to bolster his case in his current state income tax appeal. It appeared legislative immunity applied in his case, the attorney, Donald J. Gary Jr. of Winston & Cashatt, wrote to Hart in September.
Regarding Hart’s state income tax dispute, the Idaho Tax Commission issued Hart two notices of deficiency in September 2008 covering tax years from 1996 to 2004. He protested the decision, and on Jan. 15, 2009, sent the Tax Commission a letter asking to delay his hearing until 30 days after the adjournment of the 2009 legislative session. He was granted a delay to May 15. He sent another letter April 29 asking for a second delay; that year’s legislative session ran until May 8. The Tax Commission agreed to another delay but said the hearing should take place within two weeks of the end of the session.
Hart didn’t contact the commission until June 6, and the hearing was held on July 8, though the commission said he still didn’t provide all the requested documents. He sent additional materials to the commission in September 2009, including the letter from the Spokane attorney.
Virtually all states’ lawmakers and members of Congress are protected from arrest during legislative sessions, but only some states add protection from civil process. In Hart’s state tax appeal, both sides are arguing about the definition of “civil process,” among other issues.
Spitzer said he doesn’t know how Idaho courts will interpret the issue. “But I must say, it’s facts like these that lead to results that mess up this type of protective provision for everybody else,” he said. “It sounds like he is misusing this privilege for his own purposes, and so he might wind up actually damaging the strength of this protection by misusing it in this fashion.”
Hart – who serves on the House Revenue and Taxation Committee – also has had nearly $300,000 in tax liens filed against him by the IRS in the past year. His tax woes began when he stopped filing state and federal income tax returns while he unsuccessfully pressed a court challenge claiming the income tax was unconstitutional.
He said he’s now made payments, but after years of squabbling he feels the IRS has inappropriately disallowed his business exemptions and claims the agency has done so in retaliation for his refusal to reveal the names of people who bought a book he authored on his views on the unconstitutionality of taxing wages. Hart said if he could settle the business-deductions issue, “I could wrap things up and go on with my life.”