Tax Liability Statement

There has been a lot of attention in the media about Presidential appointees, members of Congress, other politicians, and even numerous members of the Obama Administration’s White House staff not paying their taxes.  The truth of the matter is that I owe back taxes as well.  However, it is not because of an accounting error. I was not being irresponsible with my money.  It is not a mistake and I was not unaware.  In fact, I’ve been painfully aware of my present tax situation.  I’ve spent many a sleepless night fretting over my plight and I don’t apologize.  The difference between me and Senator Tom Daschle or Treasury Secretary Timothy Geithner or Congressman Charlie Rangel or any number of members of the Obama Administration’s White House staff is that I’m not a former CEO or a sitting U.S. Senator or Congressman or White House staffer who has the financial wherewithall to just pull out his checkbook and say “Oh, I’m sorry. Let me pay that right now.”

It’s not that I simply didn’t pay my taxes. I live in the real world. The events and circumstances in my life leading up to this point have left me in a position where I have found myself unable to pay my back taxes in full at this time.  Allow me to explain.  In my business I held a line of credit whose primary function was to allow me to pay my taxes on time. The bank sold my line of credit (along with the lines of credit to 25,000 other businesses) to an investment firm.  The investment firm immediately cut off my line of credit and altered the amortization period on the balance I owed. This not only left me without a means to pay my taxes on time, but simultaneously doubled the monthly payment amount I originally agreed to pay.  For several months I attempted to make the payments along with my other business financial obligations, but inevitably I was forced to file Chapter 13 Bankruptcy in 2004.  For those who are unfamiliar, basically in a Chapter 13 Bankruptcy you are required to make monthly payments to a court-appointed trustee for a specified period of time.  The trustee then pays your creditors on your behalf.  In my case, that specified period of time was five years.  Two years after filing bankruptcy I was diagnosed with kidney cancer.  I had surgery to remove my right kidney in the fall of 2006.  I couldn’t work at full capacity for six months following the surgery. I hired help to take up the slack, but rather than making me money, it cost me more money.  In 2007, I required a second abdominal surgery to repair the damage I had done to my muscle tissue by returning to work too soon.  This surgery was far more invasive and the recovery was even more painful and arduous than the previous surgery.  I missed another six months of work.

To summarize, since 2004 I’ve been forced to file bankruptcy, survived cancer & two surgeries, and over a two year period lost one year of income.  I have no disability insurance, no health insurance, and no remaining savings. After paying my living expenses and meeting my obligation to the bankruptcy court, when it came time to pay my taxes there simply wasn’t any money left to pay them. Why didn’t the Department of Revenue come after me for the money?  It would violate the rules of the Chapter 13 Bankruptcy.   The rules of Chapter 13 Bankruptcy also prevented me from selling or borrowing against the equity of my home prior to September 2009 when my Chapter 13 Bankruptcy obligations had been met. When my Chapter 13 Bankruptcy obligations had been met a tax lien was placed against my home and business by the Wisconsin Department of Revenue.

So, how do I expect to pay my back taxes?  Unlike some people, I know that you can’t borrow your way out of debt.  Having recently emerged from Chapter 13 Bankruptcy, my first effort was to put my home up for sale with the idea that the proceeds from the sale be used to pay my back taxes.  After 5 months on the market and only one person interested enough to even walk through my house, the City of Milwaukee lowered the assessment on my house for the third time.  Low enough so that like so many other Americans, the equity in my home had vanished.  Additionally, a comparable home not two blocks down the street from mine recently sold after over a year on the market for some $50,000 less than the asking price on my home. This told me that the real estate market could not support efforts to sell my home to raise the money to pay my tax liability.  The sale of my home to raise the money to pay my delinquent tax liability having failed, I am making efforts to restructure my mortgage. I have filed an affidavit of hardship with my mortgage lender and applied for a loan modification to reduce my monthly mortgage payment.  I have curtailed virtually all personal discretionary spending, and I have entered into an installment agreement with the Wisconsin Department of Revenue. The long and the short of it is I owe back taxes and I have entered into an installment agreement with the Wisconsin Department of Revenue to get them paid.

It’s not that I didn’t want pay my back taxes.  The events in my life have left me in a position where I found myself unable to pay my back taxes in full.

As a candidate for public office, I feel it is important to be honest and up-front with the people that I wish to represent in Washington D.C.—the constituents of Wisconsin’s 4th Congressional District.

I used to think of my situation as being somewhat unique.  I’m finding out that hundreds of thousands of Americans have a similar story to tell.  This experience has given me an insight into real life “economic recovery” that far too many ordinary people have been forced to become acquainted with.  It is an insight that I think has escaped our current Democratic Representative in Congress entirely.