The Internal Revenue Service has released a tax lien for more than $80,000 against a company formerly led by Democratic lieutenant governor nominee John Burkhalter of Little Rock.
Burkhalter & Stevens Inc. of North Little Rock "has satisfied the taxes below and all statutory additions," the IRS said in its "certificate of release of a federal tax lien" filed Monday with the Pulaski County circuit and county clerk's office.
Burkhalter dissolved the company after the lien was filed in November 2012; the IRS had sought $83,227.77.
A former business partner came up with the funds to settle the matter, a spokesman for Burkhalter's campaign said.
"Although the IRS and my accountant agreed that I had no liability, I engaged them to help address the problem and the matter is now closed," Burkhalter said Wednesday in a written statement.
A spokesman for the IRS could not be reached for comment Wednesday.
Burkhalter, president of Burkhalter Technologies, is making his first bid for elected office. He is a former chairman of the state Economic Development Commission and member of the state Highway Commission.
He faces Republican Tim Griffin of Little Rock, a former aide to President George W. Bush who has served as the 2nd District congressman since 2010. Among other things, he previously worked for the Republican National Committee, as interim U.S. attorney for the Eastern District of Arkansas and operated his own law firm and public affairs consulting business.
Burkhalter's spokesman, Byran Griffith, said these taxes "were never John Burk--halter's to pay back and the IRS has never attributed any responsibility to John Burk--halter."
"The IRS closed out this issue by accepting funds being held in trust that has been re[paid] by the former operating shareholder, who had diverted funds from the company and who bore the ultimate responsibility for this issue," Griffith said.
Confidentiality agreements "prevent us from releasing the name of John's former partner," Griffith said.
Records filed with the secretary of state's office and U.S. Bankruptcy Court have identified the partner as Joseph "Joey" Stevens. Stevens was listed as the president of Burkhalter & Stevens Inc. in records dated 2007 and 2009 in the secretary of state's office.
Burkhalter was listed as the company's president starting in 2010, though Griffith has said the company effectively ceased operations in 2009. Despite what the paperwork says, Griffith has said that Burkhalter never assumed the presidency of the company and "outside accounting professional listed John as president in the absence of any other officer in order to successfully close out the affairs of the company."
Through Griffith, Burkhalter has blamed "the management team at the time" for the IRS lien, which he said stemmed from unpaid payroll taxes in 2007 and 2008. Stevens has declined to comment about the matter. Griffith has said the tax lien dates to "a silent ownership" from 2007 under which Burkhalter provided his name and credibility to a construction business, but never received "any compensation or distributions from this company."
Annamarie Atwood, Griffin's campaign manager, said in a written statement that, "Mr. Burkhalter was president and lead investor in Burkhalter and Stevens and failed to pay $80,000 in payroll taxes."
Burkhalter "should take responsibility instead of claiming he had nothing to do with a company he led and named after himself," Atwood said.
But Griffith, who is Burkhalter's spokesman, replied in a written statement that, "More distortions from a 20-year Washington, D.C. political insider who has never met a payroll, created jobs, or managed a legitimate business, won't change the fact that this is untrue.
"And according to the IRS itself, the matter is closed," Griffith said.
An April 21, 2008, Arkansas Business article about Burkhalter & Stevens Inc. described Burkhalter as that company's "lead investor."
Burkhalter, president of Burkhalter Technologies, has described himself as "a passive investor" in Burkhalter & Stevens, a construction firm that he said "was a victim of the times in the downturn of the economy."
Along with Libertarian candidate Christopher Olson of Leslie, Burkhalter and Griffin are vying for the lieutenant governor's office that has been vacant since Springdale Republican Mark Darr resigned on Feb. 1. Darr resigned after he was fined $11,000 by the state Ethics Commission for improperly using campaign and tax funds.
Metro on 07/31/2014