A D.C. Council member who serves on a powerful finance committee is facing a federal lien seeking more than $50,000 in unpaid income taxes — the third city lawmaker to face scrutiny over personal or tax debts in recent months.
The Internal Revenue Service filed the lien against Michael A. Brown, at-large independent, in April citing debts on four years of income taxes dating back to 2004.
Though the IRS does not comment on individual tax cases, the lien filed against Mr. Brown states, “We have made a demand for payment of this liability, but it remains unpaid.”
Mr. Brown, a lawyer who won citywide office in 2008, is a member of the council’s Committee on Finance and Revenue, which oversees the D.C. Office of the Chief Financial Officer. That city agency is charged with collecting, budgeting and accounting for more than $7 billion each year.
A copy of the lien filed against Mr. Brown at the D.C. Office of the Recorder of Deeds shows tax debts of $7,128.22 for 2004, $28,625.11 for 2005, $5,176.17 for 2007 and $11,951.18 for 2008.
Mr. Brown said he is close to paying off the tax debts. He said he has been on a scheduled installment plan with the IRS for about two years and that he’s never missed a payment. He said his last payment is scheduled for August.
“Nothing has been done wrong, zero,” he said, adding that his situation is no different from those of millions of Americans working to pay off taxes through installment plans with the IRS.
Mr. Brown said the tax issue surfaced after he took a deduction that the IRS later challenged as taxable income. He said he didn’t challenge the agency when it said that the money should have been taxed. He declined to identify the deduction he sought.
He said that his tax debt was recalculated after the IRS notified him that he couldn’t take the deduction at issue. He said his payments to close out the debt are “totally under control.”
Mr. Brown is the second council member to face a federal tax lien in recent months. In February, the IRS filed a lien against former Mayor Marion Barry, Ward 8 Democrat, citing more than $15,000 in unpaid income taxes from 2005 to 2008.
Mr. Barry’s tax troubles are more serious than a lien. Separately, he is on probation for failing to file a tax return. He pleaded guilty in 2005 to the misdemeanor charge in a case that involved more than $500,000 in income from 1999 to 2004.
An attorney for Mr. Barry called the lien routine when The Washington Times reported on the filing in March, adding that Mr. Barry already has been working to pay off his debt through a payment plan with the IRS.
A third council member had personal financial issues surface in public records recently. Last week, WRC-TV (Channel 4) reported on tens of thousands of dollars in credit card debts facing council member Kwame R. Brown, at-large Democrat. A candidate for council chairman, he told WRC-TV that he took full responsibility and that he’s cut back on his spending while working out repayment plans with creditors.
Kwame Brown is also a member of the council’s finance committee. Mr. Barry sat on the panel until earlier this year, but he lost his spot when colleagues voted to censure him after a report said he violated conflict of interest rules in his handling of a contract to a former girlfriend.
The lien against Michael Brown stops short of a wage garnishment, but analysts say it is still a serious matter. The lien doesn’t mean the IRS will seize any assets or property, but it still gives tax collectors a legal claim to his property to make sure the debts are paid.
Richard J. Wood, a tax professor at Capital University Law School in Ohio, who spent 10 years with the IRS Office of Chief Counsel, said the IRS policy is to demand payment first before filing a notice of a lien. He said the filing puts potential creditors of the taxpayer on notice that the IRS is owed money.
“It’s a notice of a debt that can be enforced,” he said.
Michael Brown is a lawyer at Edwards, Angell, Palmer & Dodge law firm. He won council office as an independent in 2008 after his two previous attempts as a Democrat failed. He dropped out of the mayor’s race in 2006. He waged a subsequent unsuccessful bid for the Democratic nomination for the Ward 4 council seat vacated by Adrian M. Fenty, who had held the seat before being elected mayor.
Pete Sepp, vice president of policy at the nonpartisan National Taxpayers Union, said people from all walks of life can find themselves in tax trouble. But when the debts involve an elected official who also helps decide how tax dollars are spent, “people want to know that this is a matter being handled above board and it’s being handled quickly.”
Earlier this year, Mr. Sepp noted, Michael Brown was among a group of council members who had been pushing for an increase in the tax rate for wealthy residents, a proposal that was rejected in May.
“We can only hope that council member Brown’s experience with the IRS will give him additional perspective about the financial hardship taxes can create, including local income taxes,” Mr. Sepp said.