published Thursday, October 21st, 2010

Tax investigations handled properly, Farr says

NASHVILLE -- Former Tennessee Revenue Commissioner Reagan Farr said Wednesday he is "confident" that tax investigations "were handled appropriately" during his tenure and warned public discussion of "confidential matters" may have a "chilling effect" on future enforcement.

"Tax investigations are complex undertakings and [Revenue's] investigative unit is staffed by dedicated, veteran enforcement personnel," Farr said in an e-mail.

Ultimately, he said, "the head of the department must use his or her knowledge and experiences to make the decision as to whether evidence in a case is strong enough to warrant a criminal or civil prosecution or a negotiated settlement."

Farr was responding to a report in the Chattanooga Times Free Press on Wednesday in which the Tennessee Bureau of Investigation confirmed it is acting on a request by District Attorney Torry Johnson of the 20th Judicial District in Nashville "to investigate circumstances relating to state sales tax investigations and subsequent negotiations and settlements on the part of the Department of Revenue on businesses in the state."

District Attorney Tommy Thompson of the 15th Judicial District has said he was concerned that the Revenue Department, under Farr's direction, had poorly handled an investigation into the D.T. McCall & Sons furniture chain, which he noted had "been under serious investigation for failing to pay sales taxes and paying in cash."

The prosecutor said he was not accusing Farr of intentional wrongdoing.

The McCalls have been prominent contributors to Republican candidates and causes. The president of the company, A.J. McCall, ran unsuccessfully for the state House in 2008 and considered a race for state Senate until ruling it out earlier this year.

Tennessee Democratic Party Chairman Chip Forrester leaped into the fray Wednesday saying, "I would urge any candidate who has received money from McCall PAC, or from any of the owners of the store in question, to give it back."

Republican Party Chairman Chris Devaney pointed out in an e-mail that Farr was an appointee of Democratic Gov. Phil Bredesen but said it would not be appropriate "to comment beyond that."

However, he did say the controversy "seems to have been drummed up by the Democrats."

Farr, an attorney, left the Revenue Department in late August to return to the private sector. His replacement as commissioner, Charles A. Trost, said, "I have no reason to believe that any of my predecessors or their subordinate employees within the department have acted in an other than legal and ethical fashion."

Trost said the Revenue Department cannot discuss specific investigations and noted that as a former department employee, Farr also "is still under the requirements of maintaining taxpayer confidentiality."

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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