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State tax commission questions native Idahoan’s U.S. citizenship

State tax commission questions native Idahoan’s U.S. citizenship

Idaho Freedom Foundation staff
September 20, 2013
[post_thumbnail] Bruce Skaug, a Nampa attorney and native Idahoan, was asked by the Idaho State Tax Commission to prove his U.S. citizenship when he filed for a grocery tax credit."

Well, just when you thought news involving the Idaho State Tax Commission couldn’t get any more bizarre … how about a 50-year-old native Idahoan from Canyon County required by the commission to prove that he’s a United States citizen.

The tax commission made news just a few weeks ago for going after a 12-year-old Pocatello boy to collect taxes on his summer fruit stand sales.

Now this:

“My wife and I thought the letter (from the tax commission) was funny until I had to spend so much time getting it straightened out,” said Bruce Skaug, a University of Idaho law school graduate who practices in Nampa. “Maybe it’s my Norwegian name that flagged my account and touched off an investigation,” he quipped.

Skaug tells IdahoReporter.com that several months after filing his 2012 tax returns, the Idaho State Tax Commission sent him a letter, dated June 4. “Thank you for filing your Idaho income tax return for 2012,” the letter stated. “We’ve reviewed your return, but can’t process it without more information.”

The problem, according to the commission, was that Skaug had filed for the Idaho state grocery tax credit. In order to qualify for the credit, he needed to provide proof that he is a United States citizen. The letter then asked Skaug to verify his status by sending a copy of one of several different records, including an Alien Registration Card, an arrival/departure record, a work permit card, an Idaho driver’s license, or any one of three different types of U.S. visas.

After receiving the letter, Skaug, who is a lifelong Idahoan and whose family history traces back to Idaho’s early pioneer days, tried to settle the matter on his own. “I left phone messages with the tax commission several times, but I was never able to speak with a live person at the commission,” he said. “They never returned my calls, nor did they respond to my emails. I was outraged.”

After multiple attempts to communicate with the commission, Skaug contacted Rep. Brent Crane, R-Nampa, seeking assistance. “After I spoke with Rep. Crane, I received an apology email from the tax commission,” Skaug said.

"I was partner to this, but I don't think it would be fair for me to take all the credit here," commented Crane. "Sen. Bart Davis, R-Idaho Falls, and Sen. Curt McKenzie, R-Nampa, worked on behalf of Mr. Skaug as well. This is what our job is as legislators. We are here to help constituents maneuver through the bureaucratic nightmare that sometimes exists in our government. I'm glad Mr Skaug's situation ended with a positive outcome."

It has been a not-so-kind month for the tax commission.

Earlier this month, after a report appeared in the Idaho State Journal detailing the plight of 12-year-old Tayson Weeks being investigated by the commission because he sold raspberriesduring the summer without a license and didn’t collect sales tax, Sen. Steve Thayn, R-Emmett, sent a letter to the tax commissioners noting that “I find this offensive” and that “there are too many employees at the tax commission.”

Skaug said that “there must be a lot of extra money in the tax commission coffers if we're chasing down people like me to make sure of my status as a legal U.S. citizen.”

In truth, he might not be far off the mark; the commission has been on a path of staff expansion during the past decade, and in March of this year the Legislature passed a bill to provide the commission with an extra $200,000 of funding beyond what had already been appropriated for the agency for fiscal year 2013.

Concerns about the behavior of the tax commission predate the incidents involving Weeks and Skaug. In October of 2010 staffers of the commission sought to shut down a pumpkin stand operated by two children in Lewiston.

And earlier this year, three state senators—Bert Brackett, R-Rogerson, Les Bock, D-Boise, and Senate President Pro Tem Brent Hill, R-Rexburg—sent a letter to the state government’s Office of Performance Evaluations (OPE) to undertake a study to determine how the Idaho State Tax Commission might create an IRS-styled division of taxpayer advocacy.

In June, Bock, an attorney who has practiced taxation law, told IdahoReporter.com why the idea of a taxpayer advocacy office was important.

“This is an issue that is near and dear to my heart,” he said. “Over the years I’ve done a fair amount of legal work representing people to the commission. I think it’s a widely held sentiment among practitioners, both attorneys and accountants, that most of us would rather deal with the IRS than our own state tax commission. I suspect that Sen. Hill (an accountant) would agree with me on this.”

Bock noted that the IRS has what he characterizes as “fairly detailed and predictable procedures” that it follows. “For the most part, you know what to expect when you deal with the IRS. But unfortunately with our state tax commission, there is a tendency for them at times to get lost in the minutia, and the taxpayer loses in these instances.”

On the other hand, Bock added that the amounts of money at issue in disputes with the state tax commission are usually much lower than the dollar amounts involved with the IRS, yet a dispute with the state commission can potentially create greater hardship for the Idaho taxpayer.

“For example, you might get somebody who has a dispute with the tax commission, and they may need to spend $5,000 to fight that dispute when their bill from the commission is only, say, $2,000,” explained Bock. “Some people will fight the commission out of principle, but most will not. People in these situations know that the commission is wrong, but they really can’t do much about it. They just cave in, pay the penalty and move on, and that’s not right.”

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