June 14, 2012
By: John Clark
Idaho state Rep. Phil Hart, who is known for his vehement stance against taxation, has enlisted the aid of the federal government and filed for Chapter 13 bankruptcy protection, according to a report from the Idaho Statesman-Review.
The bankruptcy filing puts a cap on a difficult period for Hart, as he just lost his bid to win a fifth term two weeks ago during the Republican primary contest.
Sources say that Hart’s bankruptcy petition lists only three creditors, which is a relatively small number of lenders for a Chapter 13 filing.
Hart reportedly owes money to the U.S. Internal Revenue Service (IRS), the Idaho State Tax Commission, and a construction-defect law firm in Sacramento, California.
Hart’s debt problems begin with the IRS, to which the former politician reportedly owes more than half a million dollars in unpaid federal income taxes, penalties and interest. In addition to his dispute with the federal government, Hart also owes more than $53,000 in unpaid state income taxes and penalties.
And the government has not taken Hart’s transgressions lightly. Sources indicate that Hart is also fighting a lawsuit filed by the U.S. Department of Justice, which is trying to foreclose on Hart’s home in Athol, Idaho. Trial is set for the foreclosure case this November.
Many people file for Chapter 13 bankruptcy with the intention of stopping a home foreclosure, and it can be speculated that this is the purpose of Hart’s filing, but his bankruptcy attorney refused to tell reporters whether the bankruptcy was linked to the foreclosure.
Still, whatever his motives were, it is likely that the automatic stay, which is a key part of any bankruptcy filing, will temporarily (and perhaps permanently) put a stop to the foreclosure proceedings.
Sources say that Hart has a history of running afoul of the law. In 1996, Hart illegally harvested timber from state land in order to gather enough logs to build the home in which he is currently living.
And Hart has also claimed that state and federal income taxes are unconstitutional. In support of this belief, Hart reportedly filed an unsuccessful lawsuit against the federal government in the 1990s.
During this time, he failed to file tax returns for three years. Since that episode, however, he says he has consistently paid his taxes, but both the federal and Idaho governments are disputing this claim.
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