Judge dumps tax protesting ex-rep's 2nd bankruptcy

BOISE, Idaho (AP) Federal authorities are closer to seizing a tax-protesting former northern Idaho lawmaker's home after a judge dismissed his second bankruptcy filing.

Ex-state Rep. Phil Hart has been ordered by courts to pay the federal government and state more than $600,000 in delinquent income taxes, interest and penalties.

He's tried to protect assets by filing a pair of bankruptcies.

The Spokesman-Review reports both have now been dismissed, the latest Monday by U.S. Bankruptcy Judge Terry L. Myers, who also ordered Hart to submit to a Jan. 7 deposition.

Hart's bankruptcies were rejected as inappropriate.

In the first, he proposed repaying about $12,000 of the total owed.

The second one that Myers dismissed this week proposed paying $106 monthly for three years about $3,800 total.

Lawyers for the Internal Revenue Service argued that because Hart wasn't re-elected to another term, his source of income for repaying any of his debts to the government was about to end.

Hart's bankruptcy plan "not only fails to pay the debts required by the Bankruptcy Code, it is likely to fail to pay any debts at all," they wrote before Myers' dismissal. "Hart's legislative pay will cease imminently, if it has not yet done so. Hart stated at the meeting of creditors that he believed his engineering business would pick up enough to offset that decrease in income, but he also admitted that he did not have specific projects in the pipeline to do so."

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 in Athol, a structure he built in the 1990s with trees he acknowledged taking from state land without paying, according to litigation by the state of Idaho against him that went unresolved for years.

Hart has sought to protect the home by placing it in a trust named for his daughter, but the IRS has rejected that as inappropriate, too.

It's unclear just how much Idaho will be able to collect of the $62,000 it says Hart owes from unpaid state income taxes.

"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.

Debbie Coulson, bureau chief of the Field Collections Bureau for the Idaho State Tax Commission, said the state would first attempt to collect the full amount or put Hart on a payment plan.

"We hope people will cooperate with us to their best interest and ours," she said. "It doesn't always happen that way."

Hart, who couldn't be reached by The Associated Press for comment, has argued unsuccessfully including in a book he penned called "Constitutional Income" that income taxes as they're now collected violate the U.S. Constitution.


Information from: The Spokesman-Review,