Skeletons in the closet at the ITC, Oh My!

Thanks to the Boise Guardian for this post. Perhaps if the Statesman had read this story then they might have had a better take on Stan Howland's whistle blowing.

Secret Tax Policy

Posted By dave On August 31, 2006 @ 10:31 am In Taxes | 22 Comments

If reports are true in the Daily Paper, Idaho has a secret tax system administered by a commission which grants sales tax breaks to some businesses, but not others.

Ken Dey, the reincarnated business editor at the Daily Paper broke a major story Thursday when he revealed a secret tax deal between the Idaho Tax Commission and Cabela’s.

We all know the quiet way to avoid the Idaho sales tax–now at 6%–is to buy out of state. The GUARDIAN even made mention of the potential loss of revenues if there was a big shift to out of state and internet shopping.

Catalog merchants with physical locations in state like CostCo, R.E.I., Sears and many others collect and pay sales tax. However, the big guns at the outdoor store don’t play by the same rules. They claim it is such a wonderful benefit to have a Cabela’s store that catalog sales should not be taxed.

They got the Idaho Tax Commission to agree that catalog sales are a different company than the retail outlet–despite the same merchandise, company name, etc.

One would think that a store specializing in hunting supplies would be able to recognize that if , “It looks like a duck, walks like a duck, and flies like a duck, chances are it IS A DUCK.”

In their zeal to attract more business, more jobs, more cars, more people, our government agents constantly make concessions to the big boys. This one is simply wrong–if not illegal.

This deal is so wrapped in camouflage the only you can find it is by smell. The tax commission refused to discuss or show the daily paper the concession deal and would not even confirm or deny it exists. That folks, is secret government cloaked in camo.

We don’t want to know any confidential tax return information. This is a SECRET POLICY which Ken Dey has revealed. How many other secret private deals has this commission struck. Does your neighbor get an exemption from income tax because he is richer than you? Secrecy in tax policy destroys any faith we may have in our government. They won’t even tell us the rules!

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Article printed from Boise Guardian: http://boiseguardian.com

URL to article: http://boiseguardian.com/2006/08/31/secret-tax-policy/

Otter calls for sales tax increase in tight times

While Butch Otter is calling for more taxation of the citizen's he is also in support of the cover-up from the AG's office over complaints against the tax commission by a long time auditor. Stan Howland, in his whistle blower complaint identified that a decades long practice at the tax commission - that of giving a free pass to corporations, is costing the state between $46,000 and $680,000 in unpaid taxes per account.

Wouldn't it be great if the citizens of Idaho got these free passes on taxes...

Wasden's Office Covers Up for Tax Commissioners

In the on-going saga of Stan Howland and others against the Idaho Tax Commission, the report from AG Wasden's office is a contrived cover-up and an obvious conflict of interest.

This shows you how distant Idaho legislators are from real fact gathering by installing and independent investigator from outside the bureaucracy.

Today, whistle blower comes forward

This is just the tip of the corruption iceberg at Idaho's tax commission and tax appeals board.

I hope more exposure will follow, and Mr. Howland should be seen as very courageous considering the culture of deceit and cover-up at ITC.

Lawrence Wasden should be considered as complicit, as many in the legislature, for failing to act when complaints were raised.

May 29, 2008
Auditor says secret tax deals cost state millions

A whistleblower's report says the Idaho Tax Commission improperly allows out-of-state corporations to escape paying their fair share.

Idaho tax officials have let corporations out of millions of dollars of taxes by cutting secret deals when the companies fight their audits, a commission auditor said Wednesday in a 17-page whistleblower report.

Stan Howland, a corporate income tax auditor for the tax collection agency for 28 years, said the four appointed members of the Tax Commission, as well as the deputy attorneys general who advise them, routinely allow largely out-of-state corporations to pay just a percentage of what they really owe.

And the companies share information about how to save money on Idaho taxes, he said.

Howland said legislative auditors tried to stop the practice more than a decade ago, but it continues today.

Commissioners use disclosure loopholes in the state's public records laws to keep these decisions secret, Howland said in his report, which he delivered to Gov. Butch Otter, Attorney General Lawrence Wasden and Idaho's 105 legislators.

Otter and Wasden's offices declined to comment Wednesday, saying they hadn't had time to review the report.

But Sen. Brent Hill, R-Rexburg, a certified public accountant and chairman of the Senate Local Government and Taxation Committee, read the report. Hill represents taxpayers before the commission but not out-of-state corporations of the sort targeted in Howland's report. He said the commission strikes an appropriate balance in disputes over tax liability.

Hill said that in his experience the commission is aggressive about collecting taxes, but that compromise is sometimes in the state's interest.

"If you had the Tax Commission going after cases on the grounds of principle regardless of how much money was involved or how much time it would take in court we'd be sitting here talking about taxpayer harassment, inappropriate use of taxpayer funds in pursuing these cases and poor management," Hill said.

Without naming names of corporations, Howland's report details a few examples, each costing the state between $46,000 and $680,000 in unpaid taxes.

Hill said he accepted Howland's report as a good faith effort by a frustrated auditor and would consider his recommendations, including a possible review of the state's settlements with out-of-state taxpayers.

"If we're being too lenient, we need to look at that," Hill said.

Howland said the questionable practices began about 17 years ago and have continued despite complaints from auditors who believe the practices violate state law.

Howland said auditors feel undermined when companies win compromise settlements worth hundreds of thousands of dollars - even though the auditors' objections are proper and reflect state tax law.

"I'm hoping the Legislature will totally review all of the activities of the Tax Commission and all of its internal control policies, or lack thereof, and they'll address this situation," Howland told The Associated Press in an interview, adding that he's tried unsuccessfully to address the matter internally. "I believe Idaho taxpayers are suffering because of deals cut with large corporations."

Idaho's tax commissioners are Royce Chigbrow, an Otter appointee from 2007; Tom Katsilometes, named to the panel by then-Gov. Dirk Kempthorne in 2005; and the two longest-serving members, Severina "Sam" Haws, named by Gov. Phil Batt in 2000, and Coleen Grant, appointed by Gov. Cecil Andrus in 1991. Commissioners serve six-year terms.

Lawmakers who oversee tax issues in Idaho said they hadn't yet seen the report and couldn't comment.

"I'll look at it and follow up from there," said House Revenue and Taxation Chairman Dennis Lake, R-Blackfoot. "But as we speak, I have no knowledge of it."

Howland contends the improprieties result when companies file an incorrect Idaho income tax return, which is then corrected by the audit staff.

When a company formally protests, he says, it has become standard practice for a tax commissioner to offer a so-called "Confidential Compromise and Closing Agreement" requiring the company to pay only a percentage of what is really owed.

"This allows these companies to avoid paying millions of dollars of income tax that are properly due the state of Idaho, and to do so in complete secrecy," Howland said in his report. "The commission has settled the majority of all multistate corporate protests over the past 17 years with C&Cs. The commission has settled almost all multistate corporate protests in the past year in this manner."

Howland, who said he is about 1 years from retirement and wanted to take a stand now, contends the companies share information among themselves about how to take advantage of this practice in Idaho.

He doesn't identify the companies in his report, saying that would violate state law.

"The commission has operated that way for so many years, I think they just take it for granted," Howland said. "They don't see that all of the other taxpayers in this state are paying their full tax, and it's not fair."

The Idaho Statesman contributed to this report.

New law should change thinking

In March 2008 Butch Otter signed the new law for address confidentiality in Idaho.

It wasn't too soon because now all those folks with tax commission and appeals board will be required to take educational programs so they can try to enlarge their thinking about crime victims with sealed addresses.

The same goes for Jack Nelson (and he DOESN'T listen) in Latah County and his attorney (Miss Potter) who says that a verified religious society "isn't what they are used" to so they can't have the allowed tax exemption.

This law goes into effect July 1 and will be available to all victims of serious crime.

Sadly it didn't get to be legislation sooner.

One Commissioner's Claim to Fame and BZ's BUZZ

The STATE of AFFAIRS -

Journalism is so bad these days that it is really just a gossip column with one-sided bias. No where do you find any opposing views that might stimulate thinking or discussion. Even Letters to the Editor are limited to just a few sentences.

Then we have to read about the husband* of Mrs. Serverina 'Sam' Haws attesting to her athletic prowess. I guess this means she is proud of being good in bed. (* is an important word in Idaho because if you don't have one you are targeted and suffer tremendous discrimination. Might still be 1806 here.)

She certainly isn't a good commissioner since she continues to engage in harassment, defamation and actively covering for employee fraud (which in some circles is called obstruction of justice and racketeering).

Not bad for a banking school graduate.

I guess this leads to being promoted to the position (commissioner) by polishing political pundits.

So it claims

The mission of the Idaho State Tax Commission is to provide courteous, quality services and to administer the state's tax laws in a fair, timely, and cost-effective manner to benefit Idaho and its citizens.

This is what it says on a job fair web site from Boise State University.

Employees of the tax commmission I have had to deal with have never been courteous or fair. They are Carolyn Hartman, Claire Cunningham, Amy Brown, Natahn Wilson and John Bernasconi. Instead they have been threatening, abusive and subjected me to needless, unlawful and unending harassment throught 2002, 2003, 2004 and 2005. None of their claims were ever verified, nor did they ever - in keeping with tax commission rules - meet with me to review and verify facts.

They are not cost effective. Their zealous manner of unrelenting attacks has lasted over four years. The time and money wasted is incalcuable.

This activity is another example of secondary and tertiary vitimization of a crime victim. And I guess they don't know that Idaho has a law prohibiting this. This applies also to the commissioners and some tax appeals board staff too.

Can't say too much for the governor's office staff members who went out to maintian the smokescreen.

Remember making false claims is harassment. When you - as a state employee - make a false claim under oath, that's a felony.

and who is watching this hen house? asked the fox, licking his lips....

Chit Chat

Betsy (BZ) Russell, the go-lightly Boise reporter for the Spokesman Review in Spokane hosts a blog that reports on the oddities of S. Idaho.
Russell hasn't ever been willing to report on the oddities of the tax commission. Maybe this is the reflection of the LMT's concept that uncovering irregularities at this agency might "hurt too many people".
Would those 'people' be government hacks?

Now Butch is Gov. and will he follow through on his suggestion ?

Just wondering if Otter will follow through since Kempthorne and Risch didn't...

By the way, Congressman Otter's office suggested I go to the governor's office but I had to explain that the governor's office refused to act on it, which in itself is very telling.

Have to add that my query to Otter was totally ignored. Gee Butch, are you in bed with the tax commission?

Integrity missing

Sam Haws engages in defamation, including both slander and libel.
She may not think so, but when she covers up the wrongful actions of her agency, she becomes an accomplice in the activity.
We have to wonder exactly what she did to determine that her worker at the tax commission had falsified their report and lied under oath?
This is just one example of Abuse of Agency Policy.

Scenic Idaho

Certainly Idaho is scenic. Outside of the scenery though it is THE ultra-right RED state that doesn't follow its own laws.

All the way from the clerical level to the governors office, the bureaucrats here all think they are above the rule of law.

Corruption is exceedingly rampant. The first line of defense for this crowd is not to answer any constituents inquiry.

The same attitude is present in the legislature as well.

Take for instance Delores Crow. She is the chair of the House Tax and Revenue committee and is not at all interestsed in criminal activity at the tax commission.

Who is greasing whose palm here?

Amy, Can You Tell US Why You Left Your Job at the ITC?

In late 2004, Amy Brown from the ITC tells me she contacted the IRS to get my tax returns. She added that it was up to me to prove I was not an Idaho resident during the four years she demanded returns. She told me I had to "cooperate" because "someone" told her** I was in Idaho during these four years. I again have to ask what steps Amy took to verify this allegation. I've also tried to get Amy to tell me to whom she spoke at Latah County, where she claimed she got the information, but to no avail. Gee, Amy, didn't anyone ever tell you it is not nice to make threats, and by the way, it is also against the law. (** in legal-ese they call this 'hearsay' which holds water about as good as a paper boat trying to cross the Atlantic)

Here's Another Press Conundrum

Maybe it is just me, but can some one please explain to me why it would be harmful to a large number of people to report on irregularities at the Idaho Tax Commission?

Yes, it was the Managing Editor of an Idaho newspaper that said this.

should we call in the spirit of Walter Winchell to get to the facts?

Don't They Call This The Fox in the Hen House?

The foxes are in charge of the chicken coop. Having made initial mistakes they are in the position of having to defend those mistakes by compounding them. Clearly, there are not enough checks and balances in place. Not enough watchdogs to guard against the foxes nor enough penalties to make those in charge think twice about lying and compounding the lie. The penalties for compounding lies should increase exponentially over time to prevent the paramount ethic at work from being, "Cover your tracks at all costs."

"A lawyer is a representative of clients, and officer of the legal system and a public citizen having special responsibility for the quality of justice."

Not so if your name is Linda Pike and you work for the Idaho Board of Tax Appeals. You don't even have to follow the Rules of Professional Conduct, Court Rules or procedures spelled out in the Idaho Statutes and Administrative Code.

You think too that you have the power, just like Carolyn Hartman, to claim you are a judge in the Superior Courts of two counties in Washington state, and freely alter an order of the court, with no authority to do so, putting a person's life at risk of grave harm.

It's good that you think too your experience with the Tax Appeals Board qualifies you to be a county commissioner.

I guess this puts you on par with another UI Law School grad that suggested I should have lied and then I would have avoided all this.

I majored in Ethics while completing my advanced degrees, maybe you missed this class or the toxic farm chemicals in the air around here altered your moral aptitude.

Stay tuned for the latest

Well you see the ITC has a Q & A service you can contact through their web site called "taxrep". I was curious about something so last night I sent a query to taxrep.

Here is what "taxrep" replied late this afternoon: "Nonprofit organizations are exempt from income taxes".

Were Carolyn Hartmann, Clare Cunningham, Amy Brown, Linda Pike, DuWayne Hammond, Larry Watson, Colleen Grant or Sam Haws listening during the last three years? 2002-2005

and then along came Wilson, Nathan Wilson that is, who picked up on the same unverified theme and continued to make outrageous claims that there was NO 501c3 organization because he "could not find it listed on the IRS website".

I had to write Nathan a letter and explain to him that Congressman Butch Otter has just helped me with an issue about an incorrect address for the 501c3 (since 1989) and the IRS promptly corected it.

By the way, Congressman Otter's office suggested I go to the governor's office but I had to expalin that the governor's office refused to act on it, which in itself is very telling. I'll be posting more about this.

I went to the IRS website and found the listing in less than two minutes.

It's these gestapo tactics that really get to me.....

A brief intermission

Before I continue with the latest chapter in this amazing experience, I would like to ask the Idaho press (including the Spokesman Review in Spokane) why they seem to have such lack of interest in misfeasance by the ITC. If anyone knows the reason for this one please post the answer...

Privacy you say

So far I have had my mortgage subpoenaed, and my credit report obtained (even though the ITC failed to pay attention when I tried to explain about the Identity theft incident as part of the series of crimes that were done to me by a former business partner). That credit report, by the way, is still under resolution with the help of the FTC.

I am on disability as a result of the terrorism (the reason I have a protection order). The Idaho Code does not require those with Social Security disability income to file, yet that is not what has happened to me.

I have not been required to file for more than 10 years. This agreement was reinforced by my congressional representative and the IRS in 1997, following the 1994 tax and mail fraud by the former business partner. Three years of harassment by the IRS on this case and they never asked my former business partner to present the cancelled check he alleged he paid to me.

IMHO the Idaho Tax Commission makes the IRS look feeble in its attempts to rough people up.

Oh, I might add that I explained all of this to the ITC in 2002. Seems as if no one at the ITC ever looks in a file to verify facts. Or maybe they do not keep files. It is Clare Cunningham at the ITC who said, a year after I sent a copy of my protection order to Carolyn Hartman that they had no record of it.

Seems as if these people get on the run-a-way train at full steam ahead.

Answer this please

,
Why is it that DuWayne Hammond, Larry Watson, Severina Haws and Colleen Grant believe they are not required to follow the law?

Why is it that DuWayne Hammond stated in correspondence that Carolyn Hartman, an employee of the ITC who lied under oath in an administrative hearing did nothing wrong?

Larry Watson, remember the DUI he got and went begging to the governor in repentance? Why is it that Larry did not see anything wrong with another ITC employee, Linda Pike, an attorney, allow an in-force protection order be violated, putting a person at risk for extreme harm, because their name and (sealed) address was placed on the internet. MMMM, just how private is the ITC privacy policy?

And What about Colleen Grant who does not think it is harassment for the ITC to demand tax returns from a person who is not an Idaho resident? Maybe it is the behind the scenes operation they run that they don't want you to see. By the way, I had to send Grant an entire page defining harassment so that she understood what the law has to say about it.

And then there is Sam Haws who did not read a very important piece of correspondence asking some specific questions about the activities of the ITC that violate the Idaho Code and Administrative Procedures Act.

I am sure there will be more to show the lack of responsiveness to the law and to the citizens.

Remember now commissioners, citizens are those people you are sworn to serve.

One man's story

I learned recently from a fellow living near by about his experience with the Idaho Tax Commission.

He suffered a heart attack!

I heard this and wondered what one of my long time friends meant when he learned I moved to Idaho and told me "Good Choice." I think he meant it to be positive, but could it perhaps be construed as a facetious remark?

It is probably not much different than another friend's comment after numerous questions I asked her about the oddities and unfriendliness of the community I chose to make a new home about three years ago. She answered saying "Well, welcome to Idaho!"

She grew up in the Silver Valley, but did she too hear Baba Ram Dass at one of his famous talks say " Well, here we are....."

Is it Idaho or is it Fantasyland?

Are you one of the many "fellow Idahoans", as Governor Kempthorne calls us, that has been harmed, in some way, shape or form, by improper activities of the Idaho Tax Commission? Well, if that's you, welcome, and feel free to add your story or post your comments.

My situation is one that has taken many "twisted turns" in the over two years I have been harassed by this agency, with no real purpose. I'll be posting more about it, but to start off the discussion, what about your notice to file returns for 4 years when you did not reside in the state.