State workers fired over late income tax filings

State workers fired over
late income tax filings
Fri February 8, 2008

OKLAHOMA CITY - Failing to file state income taxes has caused political headaches for some lawmakers, but for many state employees, the consequence has been especially dire: They've been fired.

A 2003 law directs agency heads to fire state workers who do not resolve their income tax problems. The law requires the Oklahoma Tax Commission to notify agencies that have employees who have not filed their state returns.

"We don't keep track of terminations, but there have been numerous people fired due to this law," said Paula Ross, an Oklahoma Tax Commission spokeswoman.

Ross said she was aware of the firings because agency officials have called the Tax Commission to report the employee terminations.

Oklahomans who face an April 15 tax-filing deadline should be aware that failure to file is a criminal offense under state law, a misdemeanor punishable by up to a year in jail and a $5,000 fine.

Offenders rarely have been prosecuted, however.

"I know people have been prosecuted, but the cases have been handled by the district attorneys and I don't have numbers on that," Ross said.

In recent years, she said the Tax Commission has exclusively used a civil procedure to compel reluctant taxpayers to resolve their tax problems.

The Associated Press asked the Tax Commission to outline its procedures after four state House members got letters for failing to file their returns.

One of them is Rep. Lance Cargill, R-Harrah, who stepped down as House speaker soon after published reports said he did not file income tax returns for 2005 and 2006.

Cargill, who voted for the law to require the firing of state workers who did not file their returns, also was late paying property taxes on his law firm for six years.

He and the other lawmakers have apologized for the tax-filing lapses and say they have taken care of the problem.

Ross said people who fail to file income tax returns and do not respond to collection efforts could still be charged with a crime as "a last resort."

She said over the last couple of years, the Tax Commission has changed its focus from criminal prosecution to sending out "Notice to File Return" letters to taxpayers and seeking district court orders directing taxpayers to comply.

"In cases where the defendant fails to produce the returns after being ordered to do so, the OTC pursues citations of contempt for failure to comply with the court order. This procedure has resulted in the filing of returns in all but a few instances," Ross said.

"Our main goal is to have compliance with the tax laws and to make it fair and equitable for those who properly file. This measure has worked better and is more cost effective for the Tax Commission and the taxpayer."

She said the "vast majority of people file their taxes on time."

How many state employees have been fired over tax problems is not known.

Ross said her agency does not keep tabs on that; neither does the Office of Personnel Management.

Patti Omerod, the human resources program manager at the Oklahoma Merit Protection Commission, said no employees have filed appeals of their dismissals because of the tax issue in the two years she has been on the job.

For Cargill, disclosure of his tax problems was the latest in a series of episodes that led to discord in the Republican House caucus.

The former speaker has been the subject of an ethics inquiry into his fundraising activities. One of the issues was how checks made out to the state Republican Party wound up in an Oklahoma County fund.

Soon after taking office early in 2007, Cargill drew criticism after he summoned lobbyists to one-on-one meetings at a political consultant's office to seek contributions to Republican political action committees and for the speaker's "100 Ideas Initiative."

Questions have been raised about other issues, including the expenditure of more than $1.6 million during the past two years for furniture and related equipment for House members.

The Norman Transcript Editorial: No one is above the law

The Muskogee Phoenix Editorial: Wise move to resign

Speaker’s tax woes continue

Speaker Paid Property Taxs late again

Muskogee Phoenix Editorial: Speaker’s leadership in question

Oklahoma House Speaker Not Fill Income Tax Returns for Two Years !

Muskogee Phoenix Editorial: Speaker’s leadership in question

Muskogee Phoenix Editorial

Speaker’s leadership in question
Published January 24, 2008

Oklahomans have a right to be very disappointed in five state legislators who failed to file their state income tax returns on time.

The offenders, Reps. Don Armes, R-Faxon; Ryan McMullen, D-Burns Flat; Jabar Shumate, D-Tulsa; Sen. Connie Johnson, D-Oklahoma City; and House Speaker Lance Cargill, were elected because they claimed to be leaders.

Failing to file their tax returns is a poor way of demonstrating leadership.

Cargill, who failed to file his returns for two years, gave the excuses that he is human, and he and his accountant miscommunicated. He said he was disaappointed because it will cost him by reducing his refund.

It will not only cost him in penalties but in respect from Oklahomans. And frankly, Cargill has given other reasons to doubt his leadership.

Almost a year ago, Cargill held a private meeting with lobbyists to solicit funds. He did that one day before promoting a new ethics plan for openness in political fund raising.

Last year, too, Cargill organized “100 Ideas,” an initiative to present the Legislature with ideas for improving the state. But Cargill refused to identify the financial sponsors of the project, who conceivably could profit later from ideas that may be sanctioned by the Legislature.

This month, Cargill went to Texas to the home of businessman Gene Phillips, who has been linked to convicted former insurance commissioner Carroll Fisher. Fisher, who is in prison for embezzling and lying to authorities, is also accused of accepting $25,000 and other gifts from Phillips and his family and associates in exchange for favorable treatment of their insurance companies.

Also this month, Cargill defended the $8.7 million funding rollover the House accumulated while other agencies are operating without adequate funding.

Any of these issues by themselves might be overlooked as the result of human failing, poor communication.

But together, they raise an issue about the leadership this state is getting from one of its most important officials.

Oklahoma House speaker endorses McCain for president

Oklahoma House Speaker Not Fill Income Tax Returns for Two Years !

5 legislators are warned for not filing
By Nolan Clay and Randy Ellis
Staff Writers
© Copyright 2008, The Oklahoman

Oklahoma House Speaker Lance Cargill failed to file his personal income tax returns for the last two years until getting a warning from state tax officials, The Oklahoman has learned.

Four other legislators also have overdue personal income tax returns, tax records show. One has not filed five years' worth of state income tax returns, the records show.

Intentionally failing to file a state income tax return is a misdemeanor, even if no further taxes are owed. The crime has a maximum punishment of a year in jail and a $5,000 fine.

"I'm human. I made a mistake,” said Cargill, an attorney. "There's nobody more upset over it than I am because I cost myself money because I was entitled to refunds.”

Cargill, R-Harrah, said he rushed to complete federal and state tax returns and sent them in Friday after getting a notice at his house from the Oklahoma Tax Commission. He blamed a miscommunication with an accountant. Legislators in a 2003 law required state agencies to fire state employees who repeatedly fail to file state tax returns. Cargill was among those voting for the law.

The Tax Commission sent Cargill a form letter Jan. 7 warning him that its records showed he had not filed his 2005 and 2006 state income tax returns.

Cargill was told in the letter that a law requires the Tax Commission to notify any state employee "deemed to be out of compliance” with state income tax laws. He was told: "The Tax Commission is unable to verify that you are in compliance.”

As House speaker, Cargill has a key role in deciding how tax dollars are spent.

Also not filing recent state returns were Rep. Don Armes, Rep. Ryan McMullen, Rep. Jabar Shumate and Sen. Connie Johnson, records show.

Most tax records about individuals are secret but who filed a state return is public. The public records do not reflect whether the legislators owe any overdue taxes.

Armes, McMullen and Shumate confirmed they also got letters this month from the Tax Commission.

The tax records show Armes, R-Faxon, did not file 2005 and 2006 state returns. Armes said he recently sent in his 2005 federal and state tax returns and is due a refund. He said he is close to getting his 2006 returns done.

Armes said, "I just got behind. I'm a small businessman and trying ... to balance that with legislative work. We just get strung out. ... My biggest problem is just getting it done. I don't have a great excuse other than just too many irons in the fire.”

McMullen, D-Burns Flat, said he was notified he has not filed his 2001 and 2006 state tax returns. He said he was a college student in 2001 and did not have to file a return then. He blamed "the rigors of this job” for not filing his 2006 state and federal returns. He said he expects a refund.

"It's just one of those things that I've put off for a little bit. ... It's on the top of my list to do,” McMullen said. "There is a difference between people who file their tax returns late and folks who simply do not pay their taxes. I pay my taxes. Like many hardworking Oklahomans juggling jobs, church and family, I sometimes let important matters slip my mind.”

Shumate, D-Tulsa, said the Tax Commission notified him by letter he has not filed his 1999, 2001, 2004, 2005 and 2006 state tax returns. He said he thought he had filed the returns and will check with his tax preparer.

"It was a shock to me,” Shumate said. "I had no idea. ... They said that I was sent a letter in 2004 and 2007 but I don't recall getting a letter. ... I will take care of this.”



The records show Johnson, D-Oklahoma City, did not file 2004, 2005 and 2006 state returns. She blamed a 2002 divorce for not filing her recent state and federal income tax returns.

"The paperwork, you know, my ex has it and some accountant has it, so it has put me in a bind, but I know the Tax Commission is working with me to try to help me get my situation straightened out,” she said.