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.
Hart’s bankruptcy filings temporarily held up both the foreclosure case and the state’s collection action against him for more than $62,000. But the dismissal, granted Monday by Bankruptcy Judge Terry L. Myers, ends the delays.
“We won’t deal with him any differently than we would anyone else,” said Debbie Coulson, bureau chief for the Field Collections Bureau for the Idaho State Tax Commission. That means first attempting to collect the full amount or get the delinquent taxpayer on a payment plan; if that fails, Coulson said, “We have the ability to levy bank accounts, wages, or seize assets, which includes vehicles.”
She added, “We hope people will cooperate with us to their best interest and ours. It doesn’t always happen that way.”
Hart has repeatedly attempted to delay his tax cases both at the state and federal level. Both his bankruptcy filings – which prompted automatic stays on state and federal collection efforts - were deemed inappropriate by the bankruptcy court, as his debt amount was too high to be eligible for the Chapter 13 bankruptcy for which he filed. In his first filing, he proposed paying $200 a month for five years – a total of $12,000 – to get rid of his entire $600,000-plus in debt. In his second filing, he proposed paying just $106 a month for three years, a total of $3,816.
In September, the state Tax Commission received a 63-page appeal to the U.S. Supreme Court from Hart, 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.
Hart has argued that as a state lawmaker, he should have had months longer to appeal his order to pay back state income taxes than the law allows, because a legislative session occurred shortly after the end of the appeal period. Courts repeatedly have rejected that argument. The Idaho Supreme Court, in a unanimous decision, wrote in April, “In this instance, Hart is just a taxpayer, with no greater privilege than his constituents.”
A copy of Hart’s appeal to the U.S Supreme Court 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. However, the U.S. Supreme Court never received Hart’s filing, and the deadline passed.
“The story sort of ends as it begins,” von Tagen said. “Isn’t this whole case about not meeting deadlines?” The state contended all of Hart’s state tax appeals were improper because they were filed months after the 91-day appeal period expired.
Hart also attempted to assert legislative privilege as a defense in the federal home-foreclosure case, but a federal judge rejected it.
Hart wasn’t available for comment Tuesday. He left office in early December, after his defeat in Idaho’s GOP primary election in May by new Rep. Ed Morse, R-Hayden.
Hart stopped filing federal and state income tax returns in 1996 while he pressed an unsuccessful lawsuit charging that the federal income tax was unconstitutional. He began filing again after he lost the case, but authorities contend he’s never fully paid up.
In his self-written appeal to the U.S. Supreme Court, Hart wrote that he’s a victim of “political persecution.”