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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Hart files for Ch. 13 bankruptcy again

Phil Hart (Betsy Russell)
By Rebecca Boone Associated Press
BOISE — 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. Hart filed for bankruptcy in Idaho’s U.S. District Court on Wednesday, almost two months after he voluntarily dropped his previous bankruptcy case. Hart, a Republican from Athol who lost his bid for a fifth term in the Idaho House in the May primary election, stopped filing federal income tax returns in 1996 while he unsuccessfully pursued a federal lawsuit challenging the constitutionality of the federal income tax. He lost that lawsuit, and the Internal Revenue Service is seeking to collect more than half a million dollars in back taxes, penalties and interest, partly by foreclosing on his log home. Hart recently lost a separate tussle with the Idaho State Tax Commission, which said he owed more than $53,000 in past-due state income taxes and missed the deadline to appeal the amount. The Idaho Supreme Court ruled in June that Hart did miss the deadline, putting an end to his appeal of that case. The high court also ordered him to pay nearly $10,000 for the state’s legal fees. Kathryn Keneally, assistant attorney general with the U.S. Department of Justice, notified the judge overseeing the foreclosure case about Hart’s newest bankruptcy filing. In the court document, she pointed out that because it was Hart’s second bankruptcy filing in less than a year, the judge could decide to limit the hold on the foreclosure case to 30 days. But today, U.S. District Judge Edward Lodge decided against that, instead putting the foreclosure case on hold until the bankruptcy is settled or the bankruptcy judge decides the foreclosure can move forward. Hart voluntarily dismissed his previous bankruptcy case in August, after agreeing with the bankruptcy trustee that he was ineligible for Chapter 13 because his total amount of unsecured debt exceeded the limits under the bankruptcy code. Chapter 13 bankruptcy allows people to reorganize their finances and pay down debt over several years. Hart indicated that he would try to convert the case to another type of bankruptcy or dismiss it. But his latest bankruptcy filing is also under the Chapter 13 code, and his initial court documents indicate his circumstances are much the same as when he filed the first time: Hart is still claiming to have less than $50,000 in assets and to owe between $500,000 and $1 million in liabilities.