published Sunday, August 26th, 2012

Congressional hopeful Eric Stewart hit with IRS tax liens

Tennessee state Sen. Eric Stewart
Tennessee state Sen. Eric Stewart
Photo by Associated Press /Chattanooga Times Free Press.

NASHVILLE — Fourth Congressional District Democratic hopeful Eric Stewart was slapped with federal tax liens totaling $24,678.81 in 2002 and 2011 for not paying his federal personal and business taxes on time, records show.

Stewart resolved a 2002 IRS lien of $9,541.09 on his 2000 and 2001 personal taxes on March 21, 2003, according to an IRS release filed with the Franklin County Register of Deeds.

But the 2011 IRS lien remains on the books, records show. It involves $15,227.72 owed by Stewart and the insurance agency he owned on a matter involving payroll taxes for various quarters in tax years 2001-2003 and 2006.

Stewart, a state senator from Winchester elected in 2008, said in an interview Friday that he reached a settlement with the IRS and is making payments to satisfy his obligations.

"I fell on tough times and I fell behind," Stewart said when asked what happened. "I pay monthly based on my installment agreement. In accordance with the agreement, we're working to fully resolve the obligations."

He said "small businesses all over have their ups and downs and good times and bad times, some better than others."

Stewart spoke while touring the 4th District. It includes all or parts of 16 counties including Bradley, Rhea, Marion and Sequatchie. No information was available Friday on how much money he still owed.

Larry Eddlemon, a certified public accountant specializing in taxation with Chattanooga-based Hazlett, Lewis & Bieter, said the amounts listed on IRS tax liens can include penalties and interest. That could account for "a lot" of the totals listed in any lien, noted Eddlemon, speaking generally about lien-related issues.

While Stewart considers the liens issue ended, Tennessee Republicans and Stewart's opponent, Republican U.S. Rep. Scott DesJarlais, don't.

They point to a 2010 audit of Stewart's 2008 campaign finances in which state Registry of Election Finance auditors issued nine critical findings. Among them was Stewart's removal of $21,887.80 from his campaign account without reporting the related disbursements on his campaign financial disclosure statements.

"I think if you're going to have someone represent you and help offer solutions to the fiscal mismanagement of Washington, D.C., then you need someone who's not had financial mismanagement of their own," said Adam Nickas, executive director of the state Republican Party.

DesJarlais campaign manager Brandon Lewis leveled a sharper critique.

"Given our nation's fiscal deficit and his repeated financial mismanagement, voters are left to conclude that Eric Stewart can't be trusted to manage his campaign, business, or personal finances, much less taxpayer dollars," Lewis said.

Stewart fired back, saying that DesJarlais is using the issue as "a smokescreen" to avoid recent controversy from his campaign.

"This tactic only distracts voters from the issues that are most important to working families, which are Social Security, Medicare, jobs and the economy," Stewart said.

He said DesJarlais supported a Republican plan to raise the retirement age for Social Security to age 70, supported turning Medicare into a voucher program and voted for a budget plan offered by Rep. Paul Ryan, R-Wis., that he said would still leave the nation $3 trillion in debt.

"It's clear that the congressman doesn't want to debate or even discuss these most important issues," Stewart said, alluding to DesJarlais' refusal to engage in a public debate.

The election finance registry's audit findings in Stewart's 2008 campaign resulted in a $100 fine. The problems were pointed out by the DesJarlais campaign in April.

Drew Rawlins, executive director of the state's Bureau of Ethics and Campaign Finance, said in an interview that Stewart later corrected problems and "fixed everything."

Meanwhile, the Federal Election Commission in May issued a warning letter to Stewart's campaign noting his finance report for Jan. 1-March 31 did not list January receipts or expenditures. The campaign corrected the omission five days later, blaming it on a clerical error.

When the issue of the IRS liens came up last week, Stewart's campaign initially provided a statement to the Chattanooga Times Free Press in which he said, "I accepted responsibility, paid the fines and moved on."

Asked later by a reporter to provide proof of payment, Stewart spokesman Avery Poor replied by email that "our statement on this matter is the same from yesterday."

After obtaining full copies of the documents from Franklin County on Friday showing the IRS' second tax lien had not been lifted, the campaign put Stewart on the telephone with a reporter.

"I guess I wasn't very clear," Stewart said, noting he was paying that on installment basis.

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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