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IRS auctions home of former state Rep. Phil Hart

Scott Maben and Betsy Russell,

The home of tax-protesting former Idaho state Rep. Phil Hart was auctioned Thursday on the Kootenai County Courthouse steps for back taxes.

It sold for $182,000 to a Spokane real estate investor. Hart, who is still living in the log home, attended the auction but didn’t bid.

Mahmood Khokhar, the successful bidder, attended the auction with his wife and was one of two bidders; he told a reporter that he goes to a lot of auctions and bids on homes as part of his business. He was unaware the previous owner of the house was a former state lawmaker.

Hart and Khokhar shook hands after the auction and made plans to get together and go over arrangements.

Hart was the successful bidder for the home at an auction Oct. 1 with a bid of $202,740. After putting up the required 10 percent deposit, however, he failed to pay the balance and the sale fell through. His forfeited deposit was applied toward his $586,000-plus federal tax debt.

Hart, a tax protester, stopped filing federal and state income tax returns in 1996 while he unsuccessfully pressed a lawsuit challenging the federal income tax as unconstitutional.

“My controversy with the IRS has gone on for 18 years, and probably will continue until I disavow the book I authored about constitutional taxation,” he wrote in an email. “All my attempts to settle my case and get my shirt unhooked from their litigation machinery have been unsuccessful.”

After the case was rejected, he began filing returns again, but authorities said he never fully paid up. He also has been fighting an order to pay more than $53,000 in back state income taxes, interest and penalties; he’s lost numerous appeals in that case, including one to the Idaho Supreme Court.

Hart settled his federal tax case in January 2015 and agreed to allow the auction of his home. When the IRS first went after the home, Hart claimed he didn’t own it, though he built it and lived there. Federal authorities, in court filings, called Hart’s attempted transfer of the home to a trust in his daughter’s name a “fraudulent transaction” with a “sham entity.”

It’s the same home for which Hart illegally cut trees from state school endowment land in 1996, maintaining that as a citizen, he had a right to take the logs for free. After repeated, unsuccessful appeals, he never fully satisfied a $22,827 court judgment over the timber theft. An expired statute of limitations prevented the state from pressing collection efforts.

The IRS set the minimum bid for Thursday’s sale at $110,000, and described the property, a three-bedroom, three-bath, 2,888-square-foot home on 10 acres in Athol, as a “Great Log Home” that “Needs some TLC!”

Hart was defeated in his bid for a fifth term in the Idaho House in the 2012 GOP primary, but remains active in state GOP politics. He is the Idaho Republican Party’s Legislative District 2 chairman and vice president of the Republican Liberty Caucus.

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