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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satisfy debts; it was his third bankruptcy filing, after the first two were questioned as inappropriate and were either withdrawn or dismissed.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.
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.
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/Betsy Russell, Eye On Boise. More here.
Question: What do you make of this latest development?
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.”