Hart says fed lawyers lying to court, not him

BOISE – Tax-protesting former Idaho state Rep. Phil Hart denies that he hid any assets or income, and charges that the U.S. Justice Department attorney in his case is the one who’s made false statements, according to newly filed documents. “None of his allegations are true,” Hart said of Justice Department Attorney Adam Strait, who was among two federal attorneys making adversarial filings in Hart’s bankruptcy case charging that Hart lied under oath, concealed or destroyed records and hid income and assets. Said Hart, in a declaration filed with the court, “It is Mr. Strait who is making false statements to the court, not me.” Strait said he couldn’t comment on the pending case. The allegations about Hart’s actions from the Justice Department and the U.S. Bankruptcy Trustee are significant because they suggest crimes could have been committed; the trustee, by law, is required to refer suspected crimes to the U.S. Attorney for prosecution. Hart has faced no criminal charges in any of his tax fights thus far, just civil actions. Hart defended his transfer of his Athol home to a trust and then arguing through his first two bankruptcy filings that he no longer owned the home because it was in an “irrevocable trust.” The U.S. District Court called the trust a “sham;” the IRS is seeking to foreclose on the log home for more than $500,000 in back federal income taxes, penalties and interest. Now, in his third bankruptcy filing, Hart is attempting to claim an exemption for part of the value of the home, a move to which the government is objecting. “The repeated references that the Sarah Elizabeth Hart Trust is a sham trust is just not true,” Hart said in his declaration. “At the time the trust was set up, I hired what I thought were experts in this field and believed I was paying them to set up a bonafide trust done correctly and free of defects.” Hart said various payments from his civil engineering firm and other deposits noted by Strait in the earlier filings were simply expense reimbursements either from the firm or from the State of Idaho for his legislative service, and one was a loan repayment from the firm. Another, he said, was a $200 birthday gift from his mother. Hart also filed objections to the amount the IRS says he owes, calling it “trumped up” and “exaggerated.” The government responded that that issue already is being addressed in the U.S. District Court foreclosure case, and trying to address it in bankruptcy court, too, is just “forum shopping.” “There is already a pending proceeding in which Hart has the right to contest his tax liabilities,” Strait wrote in bankruptcy court documents. “That case is already past summary judgment. The District Court has already made substantive rulings. Hart is forum shopping to avoid those rulings.” The federal court in June granted a partial summary judgment clearing the way for the IRS foreclosure on the home to proceed, but federal prosecutors are asking the court to reconsider and expand that ruling to cover more years of Hart’s federal tax debt. Hart, who was defeated in the GOP primary in 2012 in his bid for a fifth term in the Idaho House, noted in his declaration that he stopped filing tax returns in 1995 while he pressed an unsuccessful lawsuit charging that the federal income tax is unconstitutional. He called that “a huge mistake.” Hart said he started filing again in 2003 and has paid $156,978 toward his back taxes.