IS IT TRUE JANUARY 11, 2018
We hope that todays “IS IT TRUEâ€Â will provoke “…honest and open dialogue concerning issues that we, as responsible citizens of this community, need to address in a rational and responsible way?â€
IS IT TRUE that some dogs that chase cars get run over but only the dumbest dogs get run over time and time again without learning that chasing cars is an activity for getting hurt?…the same can be said for playing three card monte in the streets of New York City?…for those who don’t know three card monte is a card game designed to always take the money from suckers often referred to as “marksâ€?…there are literally some people in local government who keep on playing three card monte and losing time and time again just like the dumb dogs that get run over by many cars without learning their lesson?
IS IT TRUE that not-for-profits governmental agencies subsidizing a grocery store in an impoverished census tracts in and around downtown Evansville has proven to be as much of a losing venture as playing three card monte or chasing cars?  …yet some people in local government never learn? …we now are hearing that the City of Evansville Redevelopment Commission and the not-for-profit Echo Housing, Inc are scheming to become partners in investing in a questionable grocery store business venture in the North Main Street area?  …that the City of Evansville Redevelopment Commission seems to lack the capacity to learn from a past losing efforts when they invested hundreds of thousand dollars of our tax dollars on another questionable grocery store business venture located in the downtown Lincoln Avenue area? …that the many hundred of thousands dollars of our tax dollars were lost because this not-for-profit grocery store closed within a year after it opened?
IS IT TRUE isn’t the mission of the not-for-profit ECHO Housing, Inc is to provide affordable housing for the residents of the economic disadvantage people living in the Jacobsville area and not investing in a very risky grocery store business?
IS IT TRUE the mission of the not-for-profit City of Evansville Redevelopment Commission shouldn’t be the landlord of the newly renovated CVS building located on North Main Street?  …the ERC shouldn’t be funding the operational expenses of the Thunderbolts hockey team? …its obvious that the City of Evansville Redevelopment Commission shouldn’t be spending our tax dollars on another risky grocery store venture? …its obvious that they should spend some time and effort in trying to attract a for profit grocery store similar to Simpson’s Food Mart located on Covert Ave, Evansville to locate on North Main Street?
IS IT TRUE that word has it that the City of Evansville and Echo are conspiring to bankroll a losing grocery store venture in the same location were Bueler’s IGA is just about ready to close on North Main Street?…the Jacobsville neighborhood where this failed enterprise is located has around a 30% poverty rate and a median income of just over $20,000?…the reality is so far that this neighborhood has proven it doesn’t have the economic demographics to support a large discount grocery store?…that some employees of Bueler’s explicitly stated that one of the reasons for closing the North Main store was the excessive “leakage†that the store had? …â€leakage†is the technical term used to describe theft?…theft, or the so called 5-finger-discount has been alleged to be the downfall of another grocery store in the depressed census tracks in the downtown Evansville?  …at this point its obvious that using taxpayer dollars to fund another grocery store is a risky venture isn’t going to solve the problems associated with the current poor economic demographic of that area?  …it looks like we may have another “SNEGAL” deal being cut by the Evansville Redevelopment Commission? …the word “SNEGAL” stands for is “SNEAKY BUT LEGAL?
IS IT TRUE the recent decision made by the Evansville City Council that homes located in certain areas on the Westside will be charged a $10 parking fees associated with parking in front of one’s own home makes no sense at all?…there are certainly places in big cities like Chicago and New York where the overbearing big city mayors impose fees for parking in front of one’s own home but this seems like a big stretch for doing this kind of thing in a part of Westside Evansville?
IS IT TRUE in a move that the Evansville Courier and Press called for 10 years ago it appears that the institutions known as township trustees will be consolidating?…it has been proposed that 300 townships and the 300 trustees that look over them like Red Mosby will be seeing their jobs get eliminated?…the CP once mocked township trustees and compared them to driving a horse and buggy in a world filled with cars so they are getting part of their wish?…Evansville’s Knight Township made the national news years ago when a politically unknown person named Linda Durham was caught pilfering Knight Township funds to pay for personal bills and purchasing panties with boy band pictures on them?…since that time the Knight Township Trustees office is being ran in an exemplary manner by the current Trustee, Kathryn Martin?
IS IT TRUE that this evening a group of citizens are holding a community forum to discuss the recent increase in violent crime in Evansville?  …this event will be held at 5:30 p.m. at the Memorial Baptist Church on Canal Street?  …this gathering is organized by 4th Ward City Councilwoman Connie Robinson, the Rev Adrian Brooks and Rev Turner, Mothers Against Senseless Killing (MASK), the Coalition of Inner City Neighborhoods (COIN), and the Brothers Out Saving Souls Inc. (BOSS). …we urge you to attend this forum?
EDITOR’S FOOTNOTE:  Any comments posted in this column do not represent the views or opinions of the City County Observer or our advertisers
Testimony Begins On Sunday Alcohol Sales Legislation
Olivia Covington for www.theindianalawyer.com
The Indiana House Public Policy Committee received overwhelming support for proposed legislation that would allow for Sunday carryout alcohol sales during testimony on Wednesday, with retailers from both the liquor store and big-box retailers supporting the measure.
Representatives from multiple chambers of commerce and retail associations spoke in favor of the Sunday sales bill, House Bill 1051, which was authored by committee chair Rep. Ben Smaltz. The bill would allow liquor, grocery, convenience and drug stores and restaurants to sell alcohol for carryout on Sundays from noon to 8 p.m., a change from Indiana’s current prohibition on all Sunday carryout sales.
Much of Wednesday’s testimony focused on the fact that Indiana’s border states offer Sunday alcohol sales, so Hoosier consumers have begun to request the same.
John Sinder, owner of Crown Liquors in Indianapolis and chair of the Indiana Association of Beverage Retailers, said consumer feedback is what drove his organization to support Sunday sales this year, a shift from its opposition to similar legislation in years past. Similarly, Indiana Retail Council President Grant Monahan said Sunday is the second busiest shopping day of the week, and Indiana consumers want to be able to buy all of their groceries on one day in one location.
Monahan further pointed to studies that show Indiana losing roughly $12 million a year in sales and excise tax revenue due to its Sunday sales ban. That loss stems from Hoosiers crossing state lines to get around Indiana’s law.
“They’re taking their entire shopping list with them,†Monahan told the committee. “There’s a great deal of retail activity being lost in Indiana.â€
Though Rep. Sean Eberhart has long advocated lifting the Prohibition-era ban on Sunday alcohol sales, he pushed Sinder and Monahan on their newfound agreement on the issue. The Shelbyville Republican noted that the Indiana Association of Beverage Retailers had opposed his Sunday sales legislation in years past, so he questioned Sinder on why the organization’s position had changed.
Sinder maintained that times and legislative priorities change, while Monahan added that finding common ground on the Sunday sales issues could bring about an end to a longstanding legislative feud between liquor stores and big-box stores. However, Monahan also told Eberhart that the Indiana Retail Council will oppose proposed legislation that would expand cold beer sales beyond liquor stores.
Sen. Phil Boots, R-Crawfordsville, has filed cold beer expansion legislation, Senate Bill 26. The Senate Public Policy Committee will hear testimony on the bill at its Jan. 17 meeting.
The Association of Beverage Retailers and Indiana Retail Council announced a compromise on Sunday sales legislation in November, when the Alcohol Code Revisions Commission was assessing Indiana’s alcohol retail sales laws. Former Indiana Sen. Beverly Gard, who chaired the commission, said she was “bothered†by the announced compromise that came at a time when the commission was still hearing testimony and making recommendations.
Rep. Charlie Brown, D-Gary, questioned Smaltz on the possibility of another agreement on alcohol-related legislation — one between the House and the Senate, which has also proposed a Sunday sales bill, SB 1. Smaltz, however, said the proposed legislation in both chambers was written to reflect the commission’s recommendations, not any sort of agreement between lawmakers. He also noted that Sen. Ron Alting, R-Lafayette, authored the commission’s recommendations and is the chair of the committee that will hear SB 1.
Aside from Sunday sales support from liquor and big-box stores, the Indiana and Indianapolis Chambers of Commerce, Distilled Spirits Council, Wine Institute and Kroger testified in support of HB 1051. Only Lisa Hutcheson, director of the Indiana Coalition to Reduce Underage Drinking, came forward with concerns. She urged the General Assembly to begin collecting data on the number of underage sales, impaired driving incidents and other similar consequences for two years after the passage of Sunday sales legislation.
Like Hutcheson, Smaltz said he had concerns about the social impact of expanding alcohol sales. Thus, the limit on Sunday sales from noon to 8 p.m. was proposed as a way of controlling that social impact and easing the state into selling alcohol seven days a week, he said.
Smaltz did not call for a vote on HB 1051.
The Senate will consider its version of Sunday sales legislation Wednesday after Chief Justice Loretta Rush’s State of the Judiciary address. The Senate Public Policy Committee will hear testimony in the Senate Chamber, but like the House panel, is not expected to vote on the legislation.
Student Journalists Pushing For Press Freedom Bill
By Makenna Mays
TheStatehouseFile.com
INDIANAPOLIS – When Southport High School senior Andrew Tapp was approached by his advisor to lobby for a student press freedoms bill last year, he did so without hesitation.
“I’m very fortunate at Southport not to face censorship from our administration, but I know plenty of students all across the state of Indiana who do face censorship,†Tapp said.
The bill developed with the student-powered New Voices Initiative, a nationwide campaign that works with advocates in law, education, journalism and civics to write legislation that protects student press freedoms.
There have been incidents across the state where school administrations have censored student publications and disciplined media advisers such as a current case at Plainfield High School. A media adviser is currently under fire for allowing her students to publish a dating guide that administrators deemed inappropriate.
“There’s nothing truly in Indiana code that protects First Amendment rights of student journalists and their advisers,†said Ryan Gunterman, executive director for the Indiana High School Press Association, which is housed at Franklin College, which also owns TheStatehouseFile.com.
This epidemic of censorship stems from a 1998 Supreme Court case, Hazelwood v. Kuhlmeier, which ruled student’s First Amendment rights are not violated when school officials edit or prevent publication of material in school newspapers.
The first version of Indiana’s press freedom bill debuted in the 2017 legislative session. However, after passing the House education committee with only four opposing votes, it died on the Senate floor after last minute opposition from the Indiana Department of Education. A new version of the bill has been drafted for this legislative session, and contains more concise language, as well as defining what school activities are and listing what policies must include.
The Indiana Department of Education declined comment because officials have yet to see the latest version of the bill.
If the updated bill is passed, it would provide protections for student journalists to research and report about news in their schools, as decided by their advisors, but without interference from administration. It would also provide a safeguard for advisors protecting them from any retaliation from the administration for supporting the students’ right to report freely.
The Indiana School Principal Association is one of the organizations that took issue with the bill because they believed that the bill didn’t give principals any ability to edit, make any changes or offer any suggestions regarding school publications.
“We are not opposed to student journalism at all,†said Tim McRoberts, associate executive director of the Indiana Association of School Principals. “We just want to make sure that administrators have a voice in that process because the administrators are the ones held accountable.â€
However, for those supporting the bill, its importance extends beyond student journalism.
“This bill is trying to change what is normal in this state, where the First Amendment is normal, and censorship is not,†said Gunterman.
Tapp worked with legislators and other student journalists to draft the first version of the bill for the 2016 legislative session. He spent countless hours at the Statehouse lobbying for the bill and testifying before both the House and Senate education committees.
“It’s not necessarily fighting a battle for myself, but for those who can’t, the ones who are in schools that don’t have journalism programs because they were censored out of existence,†Tapp said.
Rep. Ed Clere, R-Albany, authored the bill and was adamant that student journalists should take a leading role in every part of the process. Last session, student journalists from all over Indiana participated in the process from bill drafting, introducing legislation and testimonies.
“This legislation has been and will continue to be student led,†Clere said.
Clere has a personal interest in this bill as he has a journalism background. He was a student journalist in high school when the Hazelwood case was decided.
In 1987, the principal at Hazelwood East High School in Missouri prohibited student journalists from publishing articles about teenage pregnancy and divorce on the grounds the that the subject was inappropriate.
The case was fought to the U.S. Supreme Court which ruled that the First Amendment rights of student journalists are not violated when school officials prevent the publication of certain articles in the school newspaper.
“When I joined the staff of my school newspaper, the shadow of Hazelwood had just fallen over student journalism, and nearly 30 years later, Hazelwood is still casting a shadow,†Clere said.
McRoberts, who was a high school principal for 10 years, said that not once in his time as a principal did he have to edit or censor any material published by students.
“We just felt that the Supreme Court decision is a good guideline landmark for administrators, and it does give the principal and administrator that ability to head something off if they think that it’s going to be an issue,†McRoberts said.
Clere said that this legislation would also be a teaching opportunity for journalism students.
“This legislation is more than just about student journalism, it’s about journalism education, civics education, fostering and promoting free speech and allowing and encouraging important discussions to go on in school communities,†Clere said.
He said that they tried from the beginning to reach out to school administrations, principals, superintendents and school boards to address their concerns about the bill and come up with acceptable language for the bill.
“Ultimately and belatedly, we realized they were unwilling to accept a meaningful bill,†Clere said.
During this process, McRoberts said that some changes were made to the bill by the Senate that would give the principal some authority if community standards were violated. However, when the bill went back to the House, it was changed back its original language.
Clere said that a lot of the opposition came from the schools’ wish to maintain total control, which he believes is not good for education or democracy. He insists that there are numerous checks and balances in place that would in no way give students free reign.
“I hope most administrators don’t think as poorly of their students as their lobbyists indicated,†Clere said.
McRoberts said that saying administrators want absolute power sells principals short.
“To say that I just want to maintain absolute power is an overstatement,†McRoberts said, saying administrators develop policies about student behavior whether it’s about cell phone use or dress code, and this is just a continuation of those policies.
Clere said that it is important to remember that schools are government entities.
“With any governmental entity, the government officials would love to decide what gets published or broadcast,†Clere said.
However, Clere said that these decisions should not be up to government officials, and student journalists in consultation with advisors and the administration will make responsible decisions.
As the new version of the bill moves forward, Gunterman said they will continue to contact legislators, bring awareness to the bill and speak with opponents to address their concerns but make sure that they are not sacrificing anything within the legislation.
“If we sacrifice any of that, and even like a little bit in terms of leaving it up to a certain administrator to decide whether or not to censor something they just don’t like, then there’s really no purpose of the bill,†Gunterman said.
McRoberts said that student journalism is important to them, but they just can’t relinquish the power of the principal to be involved in the publication process.
“We think that journalism is an important part of the school experience and we think it’s valuable,†McRoberts said. “We want to do whatever we can do to promote that.â€
Meanwhile, Tapp is hoping for a better outcome this time around.
“For me, it would be a victory for the guys who are at these schools who are censored to high heavens and more than anyone should be,†Tapp said. “But it would be a victory for them and I just played a small part in getting a bill passed that would make their lives better.â€
Makenna Mays is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.
Ray Signs Contract Extension
University of Evansville Director of Athletics Mark Spencer has announced the signing of head men’s soccer coach Marshall Ray to a contract extension with the Purple Aces program. The extension is official immediately
“Coach Ray has brought in student-athletes who have performed well on the field and in the classroom and is moving the program in the right direction,” Spencer said. “We are excited for the future of the program under his direction.”
The 2017 campaign was another positive step forward for the Purple Aces as Ray led his squad to its second-straight double-digit win season and the 29th winning season in program history. The back-to-back double-digit win seasons were the first since the 1995 and 1996 seasons.
Under Ray and his coaching staff, the Aces have become accustomed to competing in tight matches and have posted an undefeated record in overtime matches going 5-0-6 combined during the 2016 and 2017 seasons.
In just his third year at the helm, Ray took the Aces to the semifinals of the MVC Tournament before falling in penalty kicks. Much like the back-to-back double-digit win campaigns, the Purple Aces’ two-straight MVC Tournament semifinals appearances are the first since the 1995-96 seasons. At the conclusion of 2017 campaign, Evansville ended the season as the highest rated MVC program in the RPI.
In three season as head coach of the Purple Aces, Ray has had 15 student-athletes earn all-MVC honors. In 2017, Ray helped a pair of seniors in Ian McGrath and Chris Shuck capture all-MVC recognition with McGrath named first-team all-MVC and Shuck receiving honorable mention honors. The Aces have plenty of talent and experience to lean on in the coming years as sophomore Simon Waever joined McGrath on the all-MVC first-team and junior Zac Blaydes and sophomore Jesse Stafford Lacey earned honorable mention all-MVC recognition.
“I am a product of this campus and I take great pride in representing our University and the city of Evansville,” said Ray. “I was given a tremendous opportunity three years ago and with the help of our staff, players, supporters, and this community we have moved our program in a positive direction. We all have established a culture and environment that enables our student-athletes to compete on the field and in the classroom. I want to thank Mark Spencer for allowing me to continue to lead this program for years to come. We have more work to do to achieve our ultimate goal and replicate the success of our past teams. Our coaches and players look forward to getting back to work this spring.”
Ray’s student-athletes have also gotten the job done in the classroom as four Aces were named to the Missouri Valley Conference’s Men’s Soccer Scholar-Athlete team in 2017, bringing Ray’s total to seven. As a team, the Aces recorded a 3.486 GPA during the fall semester and received the United Soccer Coaches Team Academic award for the fifth-straight season.
State Representative Ron Bacon Files For Re-Election
He is the Vice Chair of the House Committee on Public Health and serves on the House Committee on Commerce, Small Business and Economic Development, the House Statutory Committee on Interstate and International Cooperation and the Medicaid Advisory Committee.
While in office, Bacon has made multiple tax-cut reforms helping make Indiana fifth in the nation and number one in the Midwest for the best place to do business.
Bacon says he will use his experience in southwest Indiana and help vet legislation that impacts all Hoosiers in a positive way.
Bacon has served as the Warrick County Coroner, and was heavily involved with local organizations, including the St. Mary’s Warrick Hospital Foundation, Warrick County Chamber of Commerce, and Boonville Kiwanis.
Purged From Ohio’s Voter Rolls, This Navy Vet Has His Day At The Supreme Court
by
NBC NEWS On JANUARY 10, 2018WASHINGTON — When Larry Harmon of Akron, a Navy veteran and software engineer, went to his local polling place to vote in 2015, he discovered he was no longer on the list of registered voters.
On Wednesday, the U.S. Supreme Court is taking up his challenge to the system Ohio used to remove him and others from the database. Civil rights groups say it discourages minority turnout, but the state says it’s an important tool in the task of keeping voter registration lists accurate and up to date.
“If the court sides with Ohio,” said Professor Rick Hasen, an election law expert at the University of California at Irvine, “you’ll see more red states making it easier to drop people from the voter registration rolls, and it’s going to continue what I call the voting wars between the parties.
For the Supreme Court, the issue is what a state can assume from a resident’s failure to cast a vote in more than one election. Harmon’s decision to sit out two successive elections started the state’s effort to cancel his registration.
As many states do, Ohio compares change-of-address data from the U.S. Postal Service with its state registration list to identify voters who have moved without updating their addresses. A local election boards mails notices to those who appear to be ineligible to vote. If they do not respond or vote during the following four years, their registration is canceled.
At issue in the Supreme Court is an alternative method Ohio uses to identify people who have moved. The state sends notices to those who fail to cast a ballot during a two-year period. Those who do not respond and don’t vote over the next four years (including in two more federal elections) are dropped from the list of registered voters.
It was that supplemental system that dropped Harmon from the rolls. The state says he was sent a notice. He says he doesn’t remember getting it.

A federal appeals court ruled that Ohio’s supplemental system violated a federal law, the National Voter Registration Act, which says voters can be purged from the rolls only if they ask, move, are convicted of a felony, become mentally incapacitated or die. A failure to vote, the court said, should not trigger the beginning of the purging process.
The A. Philip Randolph Institute, a civil rights group, led the effort to challenge Ohio’s system, arguing that poor and minority residents are the hardest hit.
But Ohio says the failure to respond to a notice, not a failure to vote, leads the state to remove a voter from the roles. Trump’s Justice Department, reversing the position taken under the Obama administration, is defending Ohio’s method.
“Registrants removed using that procedure are not removed by reason of their initial failure to vote. They are sent a notice because of that failure, but they are not removed unless they fail to respond and fail to vote for the additional period prescribed,” the Justice Department said in a court filing.
The outcome will directly affect Ohio and six other states that have similar laws — Georgia, Montana, Oklahoma, Oregon, Pennsylvania and West Virginia. More than a dozen other states have indicated they would like to adopt the same system.
The court will decide the case by late June.
Senate Committee Approves Survivor Health Coverage For Public Safety Officials
By Claire Castillo
TheStatehouseFile.com
INDIANAPOLIS — Lawmakers took a step Tuesday to extend health benefits to the families of law enforcement officers and other public safety officials who lost their lives in the line of duty.
Sen. Michael Crider, R-Greenfield, authored Senate Bill 152 because he said was concerned about how surviving families are affected by the loss.
Michael Whited, a firefighter from Muncie, testified in favor of the bill because he saw first-hand how a death in the line of duty can affect a family. He cited an incident where a Muncie fighter died, leaving the widow and children struggling to find access to health care.
“Police officers and firefighters put themselves on the line and their families deal with a lot,†Whited said. “Especially with firefighters working 24-hour shifts so the surviving spouse, their whole world stops.â€
The bill provides that if a person is employed by the public safety department and dies in the line of duty after June 30 the remaining spouse and family will have health insurance. The surviving children will also have health coverage until age 18 or longer under some circumstances.
Sen. Blake Doriot, R-Syracuse, said he appreciates the sacrifices of public safety officials.
“These people are so vulnerable and we need to protect them and their families,†Doriot said.
The bill now will goes to the Senate Appropriations Committee for review.
FOOTNOTE: Claire Castillo is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.
Veterans Gather At Statehouse To Meet With Lawmakers
By Andrew Longstreth
TheStatehouseFile.com
INDIANAPOLIS – Veterans and citizens across Indiana traveled to the Statehouse Tuesday morning to have their voices heard by legislators on issues important to both veterans and their loved ones.
It was the fourth annual Indiana Military Veterans Legislative Day hosted by Reps. Jim Baird, R-Greencastle, and John Bartlett, D-Indianapolis.
Jim Bewley stands in front of the congregation of veterans and elected officials early Tuesday morning, performing a rendition of “God Bless America.â€
Currently there are 16 bills that have been filed during the 2018 legislative session addressing issues like tax deductions, hunting opportunities, and the legalization and use of medical marijuana for veterans.
Veterans began the celebration with a march in unison to the Statehouse where they were greeted by legislators and citizens alike and to listen to guest speakers and organizers including keynote speaker Gov. Eric Holcomb, a Navy veteran.
Holcomb talked about the benefits that the military has brought to people across the world, and the sacrifices that soldiers and their families make to defend the nation.
The event was created so that veterans from all branches of the military could able to meet face to face with their legislators and discuss issues on a more personal level.
Various organizations and veterans took advantage of the event to promote their own individual causes and issues. Organizations such as Bosma Enterprises, a non-profit organization to help Hoosiers who are visually impaired, and NORML (National Organization for the Reform of Marijuana Laws), had booths at the event.
With House Bill 1106 concerning the legalization of marijuana, groups such as
Hoosier Veterans for Medical Cannabis, Inc. used this opportunity to meet with legislatures and make the case to pass House Bill 1106, which would legalize medical marijuana
Many veterans have been showing support for HB 1106 and are optimistic about its growing support and outcome.
“It’s been snowballing,†said Army veteran Jimmy Giordano, a member of Hoosier Veterans for Medical Cannabis. “We’re hoping this year’s the year.â€
FOOTNOTE: Andrew Longstreth is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.
Tax Court Affirms Proposed Assessments For Lack Of Evidence
OLIVIA COVINGTON FOR www.theidianalawyer.com
A lack of sufficient evidence doomed a businessman’s appeal of the Indiana Department of State Revenue’s proposed assessments against two of his businesses, as the Indiana Tax Court ruled Thursday it could not substantiate the businesses’ various expense deductions based on the evidence presented.
Beginning in 2003, Paul Elmer established two pharmaceutical companies, Pharmakon Long Term Care Pharmacy, Inc. and Hamilton Consulting Group. Pharmakon was the primary pharmacy for 41 long-term care facilities, while Hamilton coordinated the provision of respiratory care services to Pharmakon’s customers.
Some of the facilities Pharmakon served were operated by affiliates of Magnolia Health Systems, Inc., which was owned by Stuart Reed. Elmer and Reed also worked together through Hamilton, with Reed’s business, Augusta Corporation, providing licensed respiratory therapists and necessary medical supplies, while Hamilton coordinated the provision of the respiratory care services on behalf of Pharmakon. During the 2005 through 2007 tax years, Pharmakon was Hamilton’s only customer, with Hamilton, in turn, paying Augusta for its “consulting†services.
Elmer and Reed never formalized their business relationship with a written contract except when mandated by the law. Thus, when many of the Magnolia affiliates failed to pay their invoices in 2007, the companies ended their relationship.
After an audit of Pharmakon and Hamilton for the 2005 through 2008 tax years, the Indiana Department of State Revenue disallowed some of Elmer’s expense deductions and instead issued proposed assessments totaling more than $400,000 in additional adjusted gross income tax, interest and penalties. After their departmental appeal was denied, Elmer and his wife appealed to the Indiana Tax Court, which upheld the proposed assessments on Thursday.
In the Thursday opinion, Senior Judge Thomas G. Fisher first wrote the Elmers failed to establish Pharmakon’s eligibility for contract labor deductions by failing to provide sufficient detail about Hamilton’s coordination efforts for Pharmakon. Similarly, Hamilton’s entitlement to expense deductions for consulting services could not be established because the testimony Elmer and Reed offered about those services were “nothing more than unsubstantiated conclusions,†Fisher said.
“Additionally, when Mr. Reed was asked about the specifics of the agreements, particularly those regarding respiratory therapy services, he could not recall the details and deferred to his previously-completed affidavits,†the judge wrote. “The affidavits, however, do not provide any further details about the terms of any of the agreements.â€
Hamilton also sought miscellaneous expense deductions based on evidence from “general ledgers,†but those ledgers were never admitted into evidence, Fisher said. The evidence was similarly insufficient to prove Pharmakon was entitled to uncollectible debt deductions based on billing mistakes, he said, because the company did not indicate what collections measures it used to collect from private pay patients.
Finally, the court ruled that the Elmers failed to substantiate their uncollectible debt deductions as they related to the Magnolia affiliates by failing to “offer documentary evidence or some other evidence that detailed the summarized amounts of the purportedly uncollectible debt.â€
The case is Paul J. Elmer and Carol A.N. Elmer v. Indiana Department of State Revenue, 49T10-1110-TA-00064.