Athol legislator facing pressure on federal, state levels

Athol legislator Phil Hart, now entangled in multiple levels of litigation rippling from his crusade against income tax, was handed an update on Tuesday over the federal government’s suit filed against him last fall.

The suit filed in U.S. First District Court sought to collect over half a million dollars in unpaid taxes and interest from Hart, and also pushed to foreclose on property Hart allegedly conveyed fraudulently.

First District Court Judge Edward Lodge issued three orders on Tuesday denying motions by Hart and fellow defendant Jon Lafferty to extend discovery deadlines and dismiss the case.

Lodge further granted the U.S. government’s motion to strike Hart’s defense asserting legislative immunity. The judge also deemed the trial date for the case should be hastened.

“The court finds this matter is appropriate to a more expedited schedule than is currently set,” Lodge wrote in an order, setting the trial for 9:30 a.m. on Tuesday, Nov. 6 in Coeur d’Alene. “The court finds that advancing the schedule in this case is necessary, in order to avoid further arguments that the trial date unduly interferes with defendant Hart’s ability to prepare for the 2013 legislative session.”

The orders issued by Lodge on Tuesday are separate from the arguments presented before the Idaho Supreme Court on Monday, concerning the validity of a tax appeal Hart has tried to file.

Hart, who refused to pay income tax from the late ’90s through early 2000s because he considers it unconstitutional, could not be reached on Tuesday. Neither could his attorney, Starr Kelso.

The U.S. government’s suit filed last October held Hart liable for $549,703 in years of unpaid federal income taxes, interest and penalties. The suit had also described Hart’s actions as fraudulent when he transferred Kootenai County property several years ago to different trustees, including Lafferty, trustee of the Sarah Elizabeth Hart Trust.

The suit demanded the federal tax liens on the property be foreclosed and that it be sold.

Hart had filed an answer this January stating that some of the government’s claims were barred because of its own slip ups, like serving him a notice of deficiency while he was serving in the legislative session, a violation of the state constitution.

In one of Lodge’s orders on Tuesday, the judge stated that Hart can only raise a legislative immunity defense in this case if it is available under federal law.

“He has not done so here,” the judge wrote.

Lodge pointed out that legislative immunity arises under federal law if the action involves legitimate legislative activity.

As the claims in the case relate to Hart’s alleged failings to pay his income tax, Lodge wrote, “it is certain in this case that defendant Hart cannot succeed” in such a defense.

The judge also denied Lafferty’s motion to dismiss.

Lafferty has based the motion on the argument that the federal government had filed a fraudulent conveyance claim too late, beyond the statute of limitations under Idaho Code.

Lodge determined in his order that “the law is clear that the United States is not subject to state statutes of limitations, except in limited situations, not applicable here.”

Lafferty had also asserted that federal debt collection law doesn’t allow for the claim because it wasn’t filed within the required time of the fraudulent conveyance.

But Lodge wrote that that particular federal law doesn’t apply here, as the U.S. government brought the fraudulent conveyance claim under the Internal Revenue Code, allowing a 10-year statute of limitations.

The defendants had also filed two motions to extend the discovery deadline for the case. Hart requested an extension until 30 days after the end of the Idaho legislative session, which occurred on March 29.

The state representative had contended that having to answer during the session “would interrupt his work as a legislator,” the document reads.

The motion had been filed after the discovery responses were due.

Lodge wrote that he agreed with the U.S. government’s stance that Hart had been provided “ample time” to respond.

“More than enough time has been granted to defendant Hart to respond to discovery in this case,” the judge wrote.

He ordered Hart to respond to the government’s discovery requests “immediately,” and “under no circumstances any later than April 12, 2012.”

Lafferty also asked to extend the deadline to 30 days until after he had filed an answer.

The court deemed that the motion “seeks to unduly delay this matter,” however, and denied it.