In the CPA-CYA department, the Department of Revenue tells us that it can’t tell us whether it’s going to take $2.4 million in unpaid bank franchise tax out of Joop Bollen’s hide:
South Dakota law prohibits the state Department of Revenue from disclosing whether it will decide to pursue back taxes from a company set up to recruit wealthy foreign investors in an investment-for-visa program that became entangled in scandal, the department said Tuesday.
Last month, the state’s Division of Banking issued a license to SDRC Inc., the Aberdeen-based firm managing loans to projects in the EB-5 visa program, that allows it to be a nonresidential mortgage lender. That means the firm must pay the state’s bank franchise tax, the division said.
The Revenue Department is examining whether it can retroactively collect the bank taxes from SDRC, a private firm founded by Joop Bollen, a department spokesman said. But Jason Evans, property and special taxes deputy director, told The Associated Press that state law bars the department from disclosing whether it decides to pursue those taxes.
“It’s confidential taxpayer information,” Evans said. “I don’t know that we’ll ever be able to disclose that to give you the closure that you’re looking for” [“South Dakota Law Bars EB-5 Loan Firm’s Past Tax Liability Disclosure,” AP via Rapid City Journal, 2015.04.22].
The AP does not cite the specific statute that Deputy Director Evans says bar this disclosure; I’m working on that.
No statute has prevented the public from learning about the state’s possibly erroneously high assessment of Citibank’s bank franchise tax liability and Citibank’s lawsuit to reclaim some of that money. So evidently tax liability is not a state secret.
Perhaps Evans simply means that the Department of Revenue cannot disclose the status of enforcement actions. But if SDRC Inc. does owe bank franchise tax on its unlicensed banking activities on behalf of the Governor’s Office of Economic Development from 2008 through 2013, it seems we’re bound to find out. If Revenue gets the money, we’ll hear when Brown County receives a nice fat check for $1.76 million. If Revenue pursues the money and EB-5 wizard Bollen refuses to pay, we’ll hear about the state taking Bollen to court.
Joop Bollen, through SDRC Inc., may have perpetrated more than $2.4 million in fraud against the state of South Dakota. Yet the state has been curiously resistant to holding Joop Bollen accountable for anything. Let us hope thisresistance to justice is not infecting the Department of Revenue and that this odd pronouncement of secrecy about the pursuit of unpaid taxes is a brief statutory technicality about an ongoing process and not a sign that there will be no process.
Related: Kevin Woster thinks Revenue’s closed-if-quivery-lippedness is illogical:
Right now, the state has issued some sort of mortgage-lender license to SDRC, which means it will have to pay the state bank-franchise tax. It isn’t clear to me whether that means the operations of the, uh, company (if SDRC has a fire drill, how many people rush outside?) will be changing, or whether it’s just now licensed to do what it’s been doing.
Either way, it seems logical that if you can tell a reporter you’re investigating whether to charge a, uh, company a tax, you should also be able to tell that reporter, and maybe a few others, what you decided [Kevin Woster, “Until Mercer Writes the Joop Bollen Biography, We Need More on EB-5,” KELOLand.com blog, 2015.04.22].
If someone has committed a crime against the state, we need to know about the crime, and we need to know that the state is acting to restore justice and protect our interests.