Five more auditors at the Idaho State Tax Commission are calling for a full investigation of "illegal practices in settling protested multistate income tax cases."
But in their letter to Gov. C. L. "Butch" Otter, the auditors allege that other divisions of the tax commission have also engaged in illegal tax settlements, including individual income tax.
"There are some other areas where probably there has been some shady, if not improper dealings," said Paul Chugg, a CPA who works for the tax commission in the Idaho Falls office.
Chugg, a 28-year veteran of the state agency, started work the same day as Stan Howland, the auditor who first raised concerns about rampant use of secret "compromise and closing" agreements in a report in May (see Citizen Boise on page 10 for an interview with Howland).
Chugg and Howland, along with Terry Harvey, Steve Fields, Steve McCollum and Joanne Quinno want a complete investigation into the settlement practices, which routinely undermine the findings of their detailed audits. Several reviews of the commissioners' activities have already been completed, including one by the commissioners themselves and one by the Idaho Attorney General's Office, which has an advisory role at the tax commission. A well-known accountant appointed by Otter has yet to issue his opinion, but the whistle blowers on the lower floors at the tax commission call all of these reviews "superficial and biased."
"It is alarming and disturbing that the elected and appointed officials who serve the taxpayers of Idaho have not taken seriously Mr. Howland's complaints," they wrote in the Aug. 6 letter to Otter.
Otter spokesman Jon Hanian said the auditors were jumping the gun in minimizing the investigation ordered by Otter before it was complete.
"We're trying to be responsive to the concerns that have been raised here," Hanian said.
Howland wants an investigator who is authorized to look at the confidential "comp and close" agreements in which, he alleges, companies are routinely cut large breaks on their tax liability by individual tax commissioners.
LaVern Gentry, a CPA who Howland says has represented companies before the tax commission, is tasked with the most detailed review to date. He has reviewed the audit and legal files on the six cases that Howland highlighted in his report.
"I don't know how he'd do this without looking at them," Hanian said, but added, "he doesn't have sweeping authority."