Local News

September 18, 2011

Ga. lawmakers owe a lot of back taxes

One out of five Georgia legislators has failed to pay taxes on time — or in a few cases not paid them at all — a review of court records by The Atlanta Journal-Constitution has shown.

Federal, state or local tax collectors filed liens against 16 state senators and 32 representatives, the AJC’s investigation found. The liens — past and present — total $1.4 million in taxes, interest, penalties and fees.

A tax lien is a court filing in which the government serves notice on a taxpayer that it may seize his or her property to cover unpaid taxes. The liens against the legislators range from less than a hundred dollars to thousands, even hundreds of thousands, in taxes either on lawmakers’ personal accounts or on the businesses they or their spouses own.

Legislators contacted by the AJC had plenty of excuses for why tax officials had to go to court to extract payment from them. The poor economy, bad business decisions and notices lost in the mail were common explanations.

But Larry Kahn, a retired tax lawyer from Dunwoody, said he thinks the legislators should have a better record of paying their taxes on time.

“It seems a bit hypocritical that they are out there making the laws and they are not abiding by them,” he said.

It is not a new problem. Some legislators have pushed for a constitutional amendment to ban tax debtors from holding office.

“Any elected official should be held to a higher standard,” said House Ethics Chairman Joe Wilkinson, R-Sandy Springs. “Any official who is voting on taxing citizens should be in compliance himself or herself. If you owe undisputed taxes, then you should be not allowed to serve.”

Wilkinson told Channel 2 Action News Friday that he would push to bar lawmakers who have outstanding taxes from serving on committees. He said exceptions could be made for candidates or for legislators who owe taxes but have entered into agreements to pay them.

Political activist Julianne Thompson isn’t so sure. She said each case should be looked at individually.

“I don’t think I would be comfortable saying anyone who hasn’t paid their taxes or was late shouldn’t run for office,” said Thompson, an organizer for the Georgia Tea Party Patriots. “Mistakes happen, people are human.”

Lawmakers and their tax problems have made big news in recent years, including House Speaker David Ralston, R-Blue Ridge.

In 2007, before he was the speaker, Ralston paid $400,961 to the federal government for overdue taxes, interest and penalties, plus another $32,906 in unpaid withholding and Social Security taxes for employees of his law firm from 1996 through 2006. He blamed the problems on a crooked bookkeeper who pleaded guilty to embezzlement. This summer he and his wife had to pay about $1,300 in overdue property taxes on land his wife owns in what the speaker said was an oversight.

Senate Banking Chairman Jack Murphy, R-Cumming. Murphy has been hit with 27 liens over the past few years for failing to pay taxes on time on rental properties in Atlanta from 2007 to 2010.

He said the liens came as he appealed assessments on six condos he owns in Midtown. Murphy said he has paid his tax debts.

Former State Rep. Jeanette Jamieson, D-Toccoa. Jamieson, a former accountant and tax preparer, pleaded guilty in June to tax evasion and was sentenced to two years on probation and ordered to pay $15,425 in back taxes, interest and penalties. Jamieson was charged with failing to pay state income taxes in 2006 and 2007 on combined earnings of $188,000.

The AJC spent weeks researching tax liens filed against members of the General Assembly, their spouses and businesses where they had operational control or held a key position, such as chairman or president. The search included both past and present debts, including liens imposed before the member took office.

The AJC e-mailed, talked in person or made telephone calls to every member of the General Assembly who had a tax lien on his or her record. Many responded quickly, and some of the liens were clear errors. Those liens are not included in the total compiled by the newspaper.

Those that were left are a broad cross-section of the Legislature with Republicans and Democrats well represented. The group includes party leaders and back-benchers, white and black, male and female, urban and rural. And most have a story behind why they were late.

The poor economy was a common reason offered up for late payment.

The IRS has a lien against Rep. Paulette Rakestraw-Braddock, R-Hiram, for $36,343 in unpaid income taxes for 2006 and 2007. She said she got behind on her taxes when her direct marketing business fell victim to the Great Recession.

“It’s kind of hard to climb out of that hole when you are behind,” she said.

Rakestraw-Braddock, a freshman who sits on both the Small Business Development and Economic Development committees in the House, said she is negotiating a settlement — she describes it as a “long, arduous process” — with the IRS.

She said she sees no conflict with serving in the Legislature while paying off her late taxes. “I’ve always paid my taxes,” she said. “I started business in ’88 and I have paid substantial taxes during that time.”

Rep. Bubber Epps, R-Dry Branch, had a similar story to tell about $50,175 in state income taxes for Epps Brothers, a family-owned paving company. Epps, a member of the House Budget Committee, said the business got behind on taxes when several of its customers went bankrupt “owing our company a significant amount of money.”

“This money that was not collected — and still has not been — made a huge impact on our cash flow at Epps Brothers Inc. and resulted in us having to pay these taxes on an installment [plan],” he said in an e-mail to the AJC. He said those past-due taxes have been paid.

Taxes owed by the Kingdom Group, a Decatur child care business run by Doris V. Carrington-Ramsey, the wife of Sen. Ronald Ramsey, D-Lithonia, also were blamed on the economy.

The IRS filed $173,000 in liens against the center for unpaid taxes from 2007-2010. While owing the federal government, the Kingdom Group was getting money from the state for childcare services. The center received $278,122 in pre-k money from the state last year and has received about $850,000 in state money since 2006.

Sen. Ramsey lists himself as vice president and general counsel for the company, although his wife says he has not played an active role in the business since he took office in 2007.

“I am solely responsible for this tax matter which I hope to resolve in the near future,” she said, adding that lower enrollment in recent years has hurt the business. The Kingdom Group is making installment payments to the IRS to pay off the debt.

Rep. Craig Gordon’s Statewide Healthcare Inc. has $29,688 in liens from the state Labor Department for past-due unemployment contributions. Gordon, D-Savannah, is CEO of Statewide and also lists himself as CEO of a family rental property business that had $8,699 in liens for tardy property taxes.

Gordon initially chalked the problems with Statewide up to “a lack of communication” between the state and Hinesville-based Strategic Business Solutions, a company Statewide hired to manage its payroll. But DeLisa Espada, owner of the company, said the problems predate her company’s involvement with Statewide.

Gordon said Statewide is paying off the debt to the state over time, and it all should be paid back “shortly.” He said the important thing is his company is meeting its obligations and staying afloat.

“We didn’t close our doors and put 300 people out of work,” he said. “In this economy it is hard to do business and provide jobs.”

He downplayed his involvement with the rental property company, saying his father conducted the day-to-day business.

For many, the explanation was far simpler.

Senate President Pro Tem Tommie Williams, R-Lyons, was the target of a $200 lien filed by the Toombs County tax commissioner for unpaid property taxes on one of his properties.

He said the bill was mailed to the wrong address and he paid off the debt as soon as he realized it was past due.

Other explanations were more cryptic. Sen. Vincent Fort, D-Atlanta, has liens of about $40,000 for unpaid federal taxes. All he would say is, “I have an arrangement with the federal government.”

What that means is impossible to say. Aside from liens, which are public records, individual tax information is private.

The Georgia Department of Revenue had a $15,000 lien against Fort for unpaid state taxes, but those have been paid, records show.

Some lawmakers offered no explanation at all for their tax troubles.

Rep. Willie Talton, D-Warner Robins, owns a large number of rental houses in Houston County and records indicate he routinely is late paying taxes on them.

Over the past three years, county and city tax officials have filed nearly 250 liens against property in Talton’s name totaling $83,763. Usually the taxes — penalties and all — are paid seven to 10 months after they were due and the lien is released. As of last month, when the AJC counted the liens, Talton owed $23,209 in taxes on 65 outstanding liens.

Talton did not return numerous telephone calls seeking comment.

Houston County Tax Commissioner Mark Kushinka said last week he has 33 outstanding liens on Talton’s properties.

“I guess the rentals are down,” he said. “He’s not the only one who is like this in my county, and he is only one year behind. He’ll come in and pay it.”

Gwinnett County Tax Commissioner Richard Steele said collecting past-due taxes takes much of his office’s precious manpower.

“We only have three collectors and one of those is focused on bankruptcies right now,” he said. Steele said about 95 percent of the bills are collected on time.

While most of the liens were filed because lawmakers did not pay their taxes on time, sometimes it was the tax collector who made the mistake. The Georgia Revenue Department filed a lien in 2008 against Rep. Christian Coomer, R-Cartersville, for $1,604 in income taxes but withdrew it about six weeks later and sent Coomer, then a private citizen, a letter admitting the error.

Coomer said he might have been more judgmental about people with tax liens before he became a target.

“I’m much more cautious now,” he said. “You have to give a person an opportunity to explain.”

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