Background
Philip Lewis Hart is a licensed civil and structural engineer with a bachelor's degree in civil engineering from the University of Utah and a master's degree in business administration from the Wharton School of the University of Pennsylvania. He served in the Idaho House of Representatives from 2004 until voters rejected him in 2012, and was a delegate for presidential candidate Ron Paul at the 2008 Republican National Convention.
Theories Advocated/Promoted
Hart's book claims that the word "income" in the 16th Amendment means corporate earnings and not wages or salaries, and in his legal wrangles with the IRS he has argued that there is no law making him liable for the federal income tax.
Books, Web Sites, Videos, and Other Publications
Hart has self-published a book, Constitutional Income: Do You Have Any?, which he promotes through a website, http://www.constitutionalincome.com.
Court Actions
Apparently, Hart was foolish enough to try out his ideas on his own income tax returns, and filed returns for the years 1994 and 1995 that failed to include the wages he had earned. The returns included an attachment stating: "The wages I earned as reflected on my W-2 form are nontaxable personal property." He then failed to file any return at all for 1996. The Tax Court rejected all of his arguments, upholding the tax deficiencies and penalties determined by the Internal Revenue Service and imposing sanctions of $20,000 for making frivolous arguments. On appeal, the 10th Circuit Court of Appeals affirmed the Tax Court and added additional sanctions of $2,000 for a frivolous appeal. Philip Lewis Hart v. Commissioner, T.C. Memo. 2000-78 (notice of deficiency upheld and $20,000 in sanctions imposed), aff'd, 88 AFTR2d Par. 2001-5170, No. 01-70173 (9th Cir. 1/9/2002) (additional sanctions of $2,000 imposed for an appeal "wholly without merit"), cert. den., No. 02-84 (8/7/2002).
In 2005, Hart filed a petition to quash summonses issued by the United States. The reasons for the summonses, and the grounds for the petition to quash, are not clear because the filings were sealed. The United States eventually agreed to a stipulation of dismissal in 2007, after an agreement was apparently reached in an action to enforce a summons against Hart, as described below. Philip Hart v. United States, No. 1:05-mc-05902 (U.S.D.C. Idaho 6/20/2007).
Things may have come to a head in 2007 when the IRS filed a petition to enforce an administrative summons seeking financial information from Hart. Hart initially filed a response that denied that the IRS had any authority over him, but then a lawyer entered an appearance for him, withdrew the response, and then allowed an order to be entered enforcing the summons. United States v. Philip Hart, No. 2:07-cv-00066-EJL (U.S.D.C. Idaho 4/17/2007). On the same day that the court issued the order enforcing the summons, the Associated Press reported that Hart had settled with the IRS on his back taxes.
According to a 7/16/2010 Associated Press report published at IdahoStatesman.com, Hart still owes more than $700,000 in federal income tax, interest, and penalties. On 10/27/2011, the United States filed a complaint in federal district court alleging that Hart owed $549,703.48 in tax, interest, and penalties for the years 1996 through 2008 and asking that the assessments be reduced to judgments and that liens on properties be foreclosed upon. In his answer, Hart has claimed that the tax assessments are barred by the Idaho Constitutional Article III, Section 7, which states that Senators and representatives of Idaho cannot be served with civil process during the session of the legislature. However, federal law provides legislative immunity only for legislative acts. Bogan v. Scott-Harris, 523 U.S. 44 (1998). The federal complaint is therefore still pending.
Hart also struggles to avoid paying state income taxes in Idaho. In December 2010, the Idaho State Tax Commission had to go to court to ask for an order requiring Hart to file his state income tax return. The Commission stated that Hart had ignored repeated notices to file. Facing the possibility of a court order, Hart finally filed his state tax return three days before Christmas. See Betsy Z. Russell, "Hart averts another tax fight," Jan. 4, 2011, Idaho Spokesman-Review
On April 3, 2012, a federal judge rejected Hart’s effort to use state law legislative immunity. Hart had contended that a provision of the Idaho Constitution protecting state legislators from civil proceedings during a legislative session should disqualify tax notices sent to him by the Internal Revenue Service. Thomas Clouse, "No tax immunity for Idaho Rep. Phil Hart, judge says," April 4, 2012, Idaho Spokesman-Review; Order, April 3, 2012, docket entry 50, United States v. Hart, case no. 2:11-CV-00513-EJL, U.S. District Court for the District of Idaho.
In 2012, Hart lost his bid for re-election. On May 29, 2012, Hart filed a Chapter 13 bankruptcy petition in the U.S. Bankruptcy Court for the District of Idaho (Coeur d'Alene Division); case no. 12-20648-TLM. After the government objected to Hart's proposed Chapter 13 plan (in part because of Hart's refusal to answer certain questions about his assets at the meeting of creditors under Bankruptcy Code section 341), Hart agreed to have the case dismissed. The case was dismissed by Court order on August 27, 2012.
On October 24, 2012, Hart filed a second Chapter 13 bankruptcy petition in the same bankruptcy court (case no. 12-21220-TLM). Hart was unsuccessful in his attempt to get the Bankruptcy Court to extend the automatic stay that had halted the foreclosure proceeding in the U.S. District Court. The stay was lifted in the Bankruptcy Court on November 23, 2012, and the foreclosure proceeding in the District Court is still pending. Hart's second bankruptcy case was dismissed on December 17, 2012.
On January 16, 2013, Hart filed his third bankruptcy in less than eight months, this one under Chapter 7 in the U.S. Bankruptcy Court for the District of Idaho (case no. 13-20039-TLM). Because of Hart's repeated bankruptcy filings, the automatic stay that would otherwise apply did not come into effect upon the filing of this third bankruptcy. Thus, the action for the government's foreclosure against him in the U.S. District Court is currently not stayed. On January 31, 2013, Hart filed a motion with the Bankruptcy Court to have the automatic stay apply. On February 26, 2013, the Bankruptcy Court issued a decision denying Hart's request for a stay. On December 16, 2013, Hart and the government reached a settlement in connection with the government foreclosure action against Hart's residence.
On March 25, 2015, the U.S. District Court entered a judgment of foreclosure against Hart's residence to satisfy his $586,304.70 tax liability. The Court ordered that the property be sold by the Internal Revenue Service or the United States Marshal. See Order of Sale of Real Property Located at 4430 E. Sarah Loop, Athol, Idaho, docket entry 139, March 25, 2015, United States v. Philip L. Hart, et al., case no. 11-cv-00513-EJL, U.S. District Court for the District of Idaho. In January 2016, the residence was auctioned to a third party investor.
Students/Disciples
Hart's book and other writings are often cited by tax protesters, but it's not clear whether (or to what extent) anyone has really relied on his claims.
