Idaho Tax Commission chairman resigns

BOISE - Idaho Tax Commission Chairman Royce Chigbrow resigned Friday after agency employees said he intervened in cases involving his son's accounting firm as well as on behalf of a friend and political supporter.

Chigbrow told Gov. Butch Otter in a hand-delivered letter obtained by The Associated Press he was resigning "effective immediately." Chigbrow, appointed by Otter in 2007, said in the letter "unfortunately, and perhaps unfairly, I have become the issue."

"I know there needs to be a change," Chigbrow said.

His resignation comes a day after House Speaker Lawerence Denney said he expected an investigation into Chigbrow's conduct.

Ada County Prosecutor Greg Bower is also looking into whether Chigbrow violated disclosure laws by providing confidential taxpayer information to somebody who wasn't entitled to it.

Otter accepted Chigbrow's resignation, without commenting on the concerns raised by Tax Commission employees.

The governor and Chigbrow are longtime Republican allies: Chigbrow has served as Otter's campaign treasurer; now, the chairman's son, Cordell Chigbrow, is Otter's gubernatorial campaign treasurer.

"Royce has been my friend and trusted adviser for a number of years. He was kind enough to enter the arena of public service at my request, and I applaud his hard work, knowledge and expertise in that role," Otter said.

Tax Commission employees say Chigbrow sought to assist Benton "Skip" Hofferber, an Idaho businessman who supported Chigbrow's unsuccessful 2006 run for state controller. Hofferber is fighting with his former employer, Boise Food Service, after being fired in October 2009.

Employees say Chigbrow summoned them to his office to provide details of collection actions against the company to Hofferber, though Hofferber wasn't entitled to it; inappropriately handled checks he'd received from his friend at a private dining club in Boise, resulting in a Boise Police investigation; and sought to block a refund last May, after the company brought its tax payments current.

Lynn Chenoweth, former administrator of the Tax Commission's audits and collections division who retired in May, said Chigbrow took an active interest in how the agency proceeded with the Boise Food Service case.

"He would call me in a couple times a week, asking 'Where are we at with this?' " Chenoweth said. "If we hadn't done anything since the last time he had checked, he would say, 'Why not?' and 'Let's file another levy.' We would have on average 30,000 to 35,000 collection cases at any one time, so to be spending that much time on one case is unusual for a commissioner."

The Tax Commission employees also say the chairman intervened in early 2010 on behalf of a client of his son's Boise-based accounting firm to reduce a monthly payment plan to remedy delinquent taxes, despite objections of agency staff.

"Our system of taxation is not perfect, but I tried to do my best on behalf of every Idahoan during my tenure, while treating taxpayers with the respect, fairness and dignity they deserve," Chigbrow told Otter in his resignation letter.

Idaho lawmakers are calling for reforms of the Tax Commission in the wake of these concerns, as well as a separate, pending lawsuit alleging that commissioners over the years have given tax breaks to politically connected Idaho residents.

Proposed reforms could include splitting up the duties of commissioners, who not only oversee agency employees but also must decide tax protests, as well as creating a professional director position to oversee the agency.

"I do believe there are some fundamental problems within the Tax Commission and the department itself that need to be addressed," said House Majority Leader Mike Moyle, R-Star. "You'll see the Legislature look at that this year."

Senate President Pro Tem Brent Hill, R-Rexburg, said Chigbrow's departure now was the appropriate move.

"I think he could see that the governor and the Legislature would have a difficult time restoring confidence in the Tax Commission while he was still there," Hill said.

Chigbrow's resignation comes as Bower, the Ada County prosecutor, scrutinizes concerns including whether Chigbrow gave confidential tax details to Hofferber after he'd been fired.

According to Idaho law, tax commissioners are forbidden from knowingly divulging tax information. Penalties range from fines between $100 and $5,000, up to five years in prison, job forfeiture and a ban from public service.

"The issues that surround the ethical piece of this and disclosure issue remain on the table for us," Bower told the AP on Thursday. He didn't immediately return a phone call on Friday.

Robert Huntley, the Boise attorney who filed last year's lawsuit against tax commissioners over alleged improper settlements, now contends Chigbrow violated disclosure laws by communicating with Hofferber. Huntley has asked Bower to pursue the matter and said the chairman's resignation doesn't resolve what he says is potential criminal conduct.

"You don't escape by bowing out of the scene," Huntley said.

AP writer Jessie L. Bonner contributed to this report.