CHARLESTON, W.Va. -- During the 1998 political season, 36-year-old Lisa Smith, a first-time candidate for the West Virginia Legislature, and darling of the precursors of today's tea party, published a picture showing herself with then-Gov. Cecil Underwood and the Republican senate and house minority leaders. It was among the things for which her campaign spent over $150,000 seeking a two-year term paying $15,000.
Using my skills as a commercial artist and satirist, I took that photo and added "what they are thinking" dialog balloons to the image. It was widely circulated in Putnam and Mason Counties, generating much mirth but also resulting in immediate, maliciously extreme retaliation, including a press conference held by her paid campaign manager to announce a public accusation that I had committed a gun crime. A State Police investigation determined that the accuser, a convicted felon who soon left the state, had made a false complaint to score political points, and I was not charged.
Then, come January 1999, all of those four objects-of-humor were seated members of West Virginia government, three in very high places. A few months after that, the State Tax Department audited all my business and personal tax returns of every sort, back for some years. The result: They found I had overpaid my taxes by $400. I filed a claim and received credits.
Two years later, another tax auditor showed up. After three days of going through everything, he called my CPA, asked him a couple of questions, then declared all in order and gave me a certification letter.
Was all of this coincidence?
I haven't seen an auditor since.
In 2004, with the White House, U.S. Senate and House of Representatives all under Republican control, Lisa Smith, by then a state senator halfway through her term, resigned under pressure. She plea-bargained, offering a "mental problems and under psychiatric care" defense, was subsequently adjudged competent and convicted in federal court of felonious tax evasion and mail fraud.
I heard it all started when someone reported she had plastered her business corporation vehicles with campaign ads, did not reimburse the corporation from her political campaign funds and took tax deductions for the vehicles' political use beginning in 1998. But then, the auditors found much more.
The wheels turn slowly, but they turn. Ten years later, in January 2008, she was sentenced to two years in prison plus three years on probation plus repayment of $943,000 restitution. Her husband, also a corporate officer, was placed on probation and ordered to pay $358,000, a total of $1.3 million (after taxes).
Of the foregoing three audit cases, which audited person was most likely a victim of tax system political manipulation?
Who is yelling most loudly now about the IRS doing its job by taking a close look at those organizations claiming non-profit status? Money donated for political purposes is strictly not tax-deductible.
Charitable groups and foundations serving the public good are quite rightly exempt from taxes, but sham non-profit fronts for political purposes are not. Who but the IRS should enforce this law and look closely at EVERY application for tax exemption?
Cook is an author, artist, inventor and taxpayer who lives in Hurricane.