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Gaughan acknowledges owing more than $5,000 in taxes to IRS

A political development certain to dominate the rest of the 2013 campaign for Erie County comptroller was the revelation Wednesday that Democratic candidate Kevin P. Gaughan at one point owed the federal government at least $5,000 in back taxes.

He acknowledged that he is continuing to pay back the debt in an agreement with the IRS.

The County Comptroller’s Office is responsible for monitoring the county’s $1.4 billion budget, and local Republicans are questioning whether Gaughan is able to manage his own finances.

In financial disclosure statements just filed with county personnel officials, Gaughan lists a redacted amount of back taxes owed and says he entered a voluntary payment agreement for those taxes. The documents indicate the total is more than $5,000.

“These new revelations raise troubling questions about Kevin Gaughan’s finances,” said Erie County Republican Chairman Nicholas A. Langworthy, who produced the documents. “As someone seeking to oversee the finances for Erie County’s $1.4 billion budget, Kevin Gaughan owes us answers and owes them to us immediately.”

Gaughan explained Wednesday that his tax problems stemmed from a period between 2002 and 2007 when he was caring for his ailing mother (who has since died) and was unable to realize his full earning potential. As a result, he said, he worked out a voluntary payment agreement with the IRS. He said the amount has been fully paid back.

But when questioned further later Wednesday why he still listed his IRS problem as a “debt,” he said not all of his taxes have been fully paid.

“Under my installment agreement, the payments are automatically deducted from my checking account,” he said. “That process should be completed in the next several months.”

Gaughan would not disclose the amount he owed the federal government but acknowledged it was more than $5,000 – as listed on his county financial documents.

He noted that he had released his tax records (as current county Comptroller Stefan I. Mychajliw did Monday) during his unsuccessful campaign for the Assembly last year, and he had also previously listed his tax agreement on his financial disclosure report.

“For two decades, I’ve devoted a substantial amount of my time – without pay – to improving our community,” he said. “As a result, my life and personal taxes are an open book.”

Langworthy suggested that Gaughan, who is an attorney, should acknowledge exactly what he owes the Internal Revenue Service and why he has not paid his taxes.

“After repeatedly failing to pay his taxes in full and on time, Kevin Gaughan needs to explain to county taxpayers why they should trust him now to manage their checkbook when he can’t manage his own,” Langworthy said.

Gaughan had acknowledged to The Buffalo News during his 2005 Buffalo mayoral campaign that he had owed New York State $900 in taxes and penalties. He said at the time that he had paid the bill.

Those tax problems hit the political scene again this week when Gaughan acknowledged two personal judgments stemming from unpaid state taxes from 2000 and 2008 totaling more than $1,100, which Republican incumbent Mychajliw cited in a previous political exchange.

Gaughan criticized Langworthy and Mychajliw for believing that “the way to build themselves up is to run me down.”

“I don’t believe it will work with voters familiar with my long years of service to the community,” Gaughan said.

He also countered GOP criticism by saying the tax problems should not disqualify him from becoming the county’s chief fiscal officer.

“I believe my professional experience as a financial attorney and demonstrated independence from politicians better qualifies me than my opponent,” he said.