Attorneys argue tax penalty amnesty

An Oklahoma City attorney argued Tuesday that the Oklahoma Constitution clearly forbids a new state law that authorizes the waiving of interest and penalties on back taxes.
Jerry Fent appeared before an Oklahoma Supreme Court referee to make arguments justifying a lawsuit attacking the constitutionality of the law.
Oklahoma Tax Commission attorney Guy Hurst disagreed with Fent’s assessment. Hurst said interest and penalties are not treated as a liability in Oklahoma but as a way to nudge taxpayers to pay their back taxes.
The Tax Commission has implemented similar tax compliance programs in past years.
Fent’s suit challenges a law passed by the 2008 Legislature in an attempt to speed up tax collections and raise $31 million to help pay state government bills next year.
The tax compliance plan figured in an agreement between Gov. Brad Henry and legislative leaders on a $7.1 billion budget.
Under the law, individuals and companies with tax liabilities can have interest and penalties waived between Sept. 15 and Nov. 14 of this years.
Fent said the law helps “deadbeat” taxpayers at the expense of those who pay their taxes on time.
The attorney said a provision of the Oklahoma Constitution is “right on point” and prohibits the Legislature from enacting a law that forgives a debt or liability to the state.
“A penalty is a liability,” he said.
Fent said a ruling against the merits of his lawsuit would be unfair to most Oklahomans who pay their taxes in a timely manner.
Supreme Court referee Louise Helms heard the arguments and will make a recommendation to the court.
Fent has filed several lawsuits challenging legislative proposals in the past and was successful in winning court orders restricting the Legislature’s role in approval of bond programs.
Ruling in a Fent lawsuit in 2007, the Supreme Court held that legislative leaders could not take part in executive decisions about projects to be funded out of an economic development program.