Questionable spending by Tommy Henry, the former longtime commissioner of the Louisiana High School Athletic Association, has forced the group to sue the U.S. government in an effort to recover federal employment taxes, interest and related penalties. The Baton Rouge Advocate reports that the LHSAA is seeking a refund of more than $12,000 that the association paid the Internal Revenue Service in December, contending that the taxes, interest and penalties were "erroneously or illegally assessed and collected," according to the complaint filed in Baton Rouge federal court.
That figure represents just one of 12 quarterly bills that the IRS says the group owes from the third quarter of 2004 to the second quarter of 2007. The association states in the complaint that it "had been subject to an annual independent outside audit by a CPA firm, and had never been notified that any expense documentation was insufficient." If the LHSAA wins, it would be refunded the $12,247, Tim Burgmeier, the association's tax attorney, told reporter Joe Gyan Jr. If it loses, the LHSAA would likely owe the IRS some $180,000 in total taxes, plus interest and penalties that continue to accrue.
According to the Advocate, the 12 quarters of taxes were assessed after an IRS agent determined that questionable spending by Henry should be considered taxable income rather than business expenses. A legislative audit released last year concluded that Henry, who served as the LHSAA's commissioner from 1983 until he retired in 2007, may have fraudulently spent thousands of dollars of association money - including an estimated $50,000 on cigars. Meals, clothes, golf equipment and fees, along with expense filings that were seen to be duplicates, also were cited in the audit. The LHSAA, however, claims the audit does not show whether the misspending was intentional or the result of poor record keeping on the part of Henry, but it has since changed its financial procedures, Gyan reports.