Back taxes costly for legislator

A North Idaho lawmaker owes the Internal Revenue Service nearly $90,000 in back taxes, penalties and interest because he refused to pay his personal income tax for seven years.

Yet Rep. Phil Hart, R-Athol, who wrote a book about his beliefs about the federal income tax, said Tuesday he’s not a tax protester. But he objects to how Congress and the IRS interpret the 16th Amendment, which gives the federal government the power to collect income taxes.

In 1996, Hart stopped paying income tax on the money he earned as a structural engineer. He opted instead to file a lawsuit against the IRS in an attempt to show that Congress was wrongly applying the 16th Amendment.

During the next seven years, while the lawsuit worked its way through the courts, Hart refused to pay. He also self-published a book outlining his interpretation of the Constitution and 16th Amendment – based, he said, on more than 7,000 hours of research and three trips to the Library of Congress in Washington, D.C.

In 2003, after losing his lawsuit and failing to convince the U.S. Supreme Court to review the taxing authority of the Constitution and the 16th Amendment, Hart conceded and began paying his taxes.

He now has an arrangement with the IRS to pay off the $90,000 debt that has resulted in a federal lien on his property.

“By the time I’m done I will have paid more than I would have if I would have never gone down this path,” Hart said. “But I don’t regret it. There’s been some good fruit that came out of it.”

Hart, a former Constitution Party member who switched to the Republican Party before his 2004 run for the Idaho Legislature, said he accepts other taxes including taxes on business profits, investment income and property. He said that taxes pay for a civilized society. Hart never advised others not to pay their federal income taxes.

Former Rep. Wayne Meyer, R-Rathdrum, who lost to Hart in the 2004 primary, said he didn’t know during the campaign that Hart hadn’t paid his taxes and is disturbed by the revelation.

“I think it’s information the general public should have known,” Meyer said.

He’s more bothered that Hart may not be paying property taxes.

Kootenai County assessor records show Hart doesn’t directly own any property in the county. The home at Hart’s Athol address is owned by a trust in his daughter’s name. County records show that the trust owes $7,236 in property taxes for 2003 and 2004.

Hart declined to talk about his involvement with the trust and the property tax bill other than to say that the payments are “just behind” and that the reason has nothing to do with a tax objection.

Hart said he didn’t deceive voters when he campaigned for office in 2004. Even though he never publicly mentioned his tax debt or court battles with the IRS, Hart said his book and position on the income tax were easily found on the Internet. Hart’s campaign Web site stated that he is an “author and a recognized authority on taxation” but didn’t elaborate. Those specifics are found on a different Web site operated by Hart that also sells copies of his book, “Constitutional Income: Do You Have Any?”

Hart said the local Hastings book store has sold his book for about three years and that he appeared on C-SPAN 2 in July 2004 during a talk to the National Press Club in Washington, D.C., about his federal tax interpretation.

As a state lawmaker, Hart said he has no power to influence the IRS or federal tax laws. He didn’t campaign on the subject because he said it was too complicated for most people.

Hart’s legislative colleagues knew he had written a book and had very specific ideas about the federal tax system, but didn’t know he hadn’t paid his taxes. Rep. Jim Clark, R-Hayden, who is from the same district, said it never came up during the legislative session and that Hart never encouraged anyone not to pay their taxes.

Republican Central Committee Chairman Donna Montgomery was unaware of Hart’s tax debt but said it stems from the time period he was associated with the Constitution Party.

“If he’s making payments, it’s not like he’s hiding it,” Montgomery said. “He’s trying to make up for what’s right.”

The IRS filed 534,392 notices of federal tax liens in 2004 but had no specific numbers for Idaho.

“Filing a lien is a last resort the IRS takes,” said IRS spokesman David Stell.

The U.S. Attorney’s Office for Idaho prosecutes people who haven’t paid the IRS. Spokeswoman Jen McNeil said the office has no case against Hart and that the prosecution of tax avoiders is rare.

Hart, like the rest of the North Idaho delegation, is working on a way to keep property taxes affordable in Kootenai County and other resort areas where property values are soaring.

He also sponsored a bill this session that would have given leftover money from forced tax-deed sales back to the property owners. Hart plans to reintroduce the failed bill next year because he believes people who are delinquent on their property taxes owe the back taxes, penalties and fees – but not all their equity.

Hart is proud of his fight against the IRS.

“I still believe I’m right, and I still believe we can make changes,” he said.