[Vision2020] Idaho Senators Criticize New Rules on Secret Tax Deals

[Tom Hansen]

As many UI employees sweat out potential pink slips . . .

Courtesy of today's (January 21, 2009) Spokesman Review.

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Idaho senators criticize new rules on secret tax deals
Betsy Z. Russell / The Spokesman-Review  

BOISE - Senators weren’t enthusiastic this afternoon about a new Tax 
Commission rule that would clarify when the commission can secretly settle 
big tax cases.

It comes after a whistleblower’s report charging that the commission was 
cutting secret deals to excuse millions in income taxes for large out-of-
state corporations prompted several state investigations. The Idaho 
Attorney General concluded that the Tax Commission hadn’t acted illegally, 
as did a review ordered by Gov. Butch Otter, but Otter directed the Tax 
Commission to immediately develop new rules better defining and laying out 
their settlement procedures.

Those rules came before the Senate Local Government & Taxation Committee 
this afternoon, as a temporary rule that’s already taken effect. Lawmakers 
review such rules and decide whether to let them continue. But Ted 
Spangler, deputy attorney general for the Tax Commission, said the 
commission plans to work further next year on a permanent rule, and is 
proposing only a temporary rule at this point. The new temporary rule 
essentially just writes the commission’s current practice into more 
specific rules.

It lets tax commissioners settle a tax case where there’s dispute about 
liability, when commissioners think litigation will be more costly, when 
the taxpayer has economic hardship or when the settlement will “promote 
effective tax administration.” Spangler said that last reason was added 
as “sort of a safety valve in the system.” Tax commissioners retain wide 
discretion.

Senators raised several concerns about the new rule. Sen. Tim Corder, R-
Mountain Home, said, “I still wonder if this isn’t a bit broad.”

Sen. Curt McKenzie, R-Nampa, an attorney, noted that the new rule appears 
to allow broader authority for waiving tax penalties than the law actually 
allows. Spangler thanked him for pointing that out and said it’ll be 
looked at in the new, permanent rule.

Sen. Eliot Werk, D-Boise, said he thought the new rule “could lead to the 
same set of misunderstandings or perceptions that we have been dealing 
with.”

Committee Chairman Brent Hill, R-Rexburg, said he’s fine with the rule, 
but wants more information about the process commissioners will follow for 
deciding who gets the settlements and who doesn’t. “These procedures, some 
of us would like to see more of,” Hill said.

Sen. Kate Kelly, D-Boise, told the panel,”The process can be improved.” 
Kelly said beyond the definitions in the rule, the tax commission needs to 
provide for more “transparency and internal controls.” In an earlier 
letter to the state Tax Commission, she wrote that the new rule “does 
little, if anything to respond to the recommendations” of two state 
investigations.

The committee won’t vote on the rule until Thursday at the earliest.

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Sleep well tonight, Vandals.  Your state government will.

Seeya round town, Moscow.

Tom Hansen
Moscow, Idaho
 
"For a lapsed Lutheran born-again Buddhist pan-Humanist Universalist 
Unitarian Wiccan Agnostic like myself there's really no reason ever to go 
to work."

- Roy Zimmerman


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