<html><head><style type="text/css"><!-- DIV {margin:0px;} --></style></head><body><div style="font-family:times new roman,new york,times,serif;font-size:12pt;color:#000000;"><h3>June 08, 2010</h3>
<h1>Idaho lawmaker sues state over secret tax deals</h1>
<h2>She alleges that some wealthy and politically connected taxpayers
got millions in unconstitutional settlements.</h2>
<!-- removed story sidebar from here -->
<h2 id="byLine">
BY BETSY Z. RUSSELL - THE SPOKESMAN-REVIEW</h2>
<!-- STORYHEADLINE --><!-- /STORYHEADLINE -->
<!-- STORYBODY -->The deals violated the Idaho Constitution, which
requires taxing to be "uniform," said Rep. Shirley Ringo, D-Moscow. <p>Examples
listed in the lawsuit, filed Monday in 4th District Court in Boise:</p><p>•
A wealthy Idaho resident was given a $1.6 million tax break before the
audit report on that taxpayer's case had been filed, and the case was
removed from the Tax Commission's auditors. Auditors had alleged the
taxpayer was fraudulently claiming no substantial business operations in
the state.</p><p>• One state tax commissioner "reversed an audit
adjustment on a friend and individual who is prominent in Idaho
politics."</p><p>• A tax manager for a large Idaho company "told a
commissioner in a protest hearing that his opinion was asked by the
governor on all reappointments. This event occurred several months
before the commissioner was up for reappointment and the taxpayer
received a $100,000 discount."</p><p>Ringo called the cases cited in the
lawsuit "appalling."</p><p>"If those things have been going on, it just
speaks to the need for reforms," Ringo said. "I would put in on the
emergency status, because I don't want to accuse anybody of being
corrupt, but I think it bears looking into."</p><p>The Idaho attorney
general's office, which represents both the Legislature and the Tax
Commission, had no immediate comment on the lawsuit. "We're just
reviewing that right now," said spokeswoman Kriss Bivens-Cloyd.</p><p>Retired
state tax auditor Stan Howland alleged improprieties in the Tax
Commission's secret deals with certain taxpayers in 2008, when he
submitted a 17-page whistleblower report to the governor, Legislature
and others. Two state investigations concluded no laws had been broken,
but recommended reforms to the process through which individual tax
commissioners grant confidential settlements to certain taxpayers.</p><p>In
2009, the Legislature unanimously passed reform legislation to require
all such settlements over $50,000 to receive an additional hearing with
at least two tax commissioners and other officials present; to require
the agreements to be kept on file and opened to legislative auditors,
though not to the public; and to require annual reports to the
Legislature on the settlements.</p><p>In an affidavit attached to
Ringo's lawsuit, Howland said the basic problem remains, and the annual
reports don't provide enough information for anyone to tell if the
settlements are legal or not.</p>The lawsuit asks the court to order
declare current procedures and laws covering the secret settlements
unconstitutional; ban all such deals until a constitutional system is
put in place by the Legislature and the Tax Commission; and to award
attorney fees and costs to Ringo.</div><br>
</body></html>