A federal appeals court panel ruled this week that Orleans Parish Magistrate Judge Harry Cantrell owes nearly $300,000 in additional federal taxes — nearly double what he paid, belatedly, to settle his 2001 tax return.
The court’s ruling Monday appears to end a battle that Cantrell, 66, had waged with the IRS over the tax return he and his then-wife filed, claiming $1.5 million in adjusted gross income for 2001. The income came largely from his private law practice and work teaching criminal law at the Southern University Law Center.
According to the appeals court’s ruling, Cantrell didn’t pay any of the $608,846 in tax liability he had claimed until the IRS came calling in 2003, armed with a tax lien.
Cantrell, a longtime magistrate commissioner at Criminal District Court who was elected last year to the judgeship, filed an amended return that included $879,234 in business-expense deductions and revised his tax liability to $243,561.
An IRS appeals officer demanded payment of $312,624, including late charges and interest. Cantrell wrote the IRS a check and, according to court filings, considered that to be the end of the matter.
But after an IRS revenue agent, Earline Brown, reviewed his amended return, she requested a meeting with Cantrell. A month of failed phone exchanges later, Brown sent the case back to the appeals officer, rejecting Cantrell’s return and seeking payment for the full $608,846.
After a 2011 trial, the United States Tax Court rejected Cantrell’s argument that the demand letter from the appeals officer amounted to an accepted settlement and that he believed the IRS investigation was over.
Cantrell argued that the IRS pulled a “bait and switch,” misleading him, but in its six-page ruling Monday, 5th Circuit Court of Appeals Judges Eugene Davis, Jerry Smith and Fortunato Benavides sided with the Tax Court.
The panel found that the IRS agent who demanded the earlier payment had no authority to settle Cantrell’s tax liability, and that Cantrell “failed to provide any documents or records in support of the deductions he claimed on his amended return, despite multiple opportunities to do so.”
“When given a final deadline to contact Brown regarding his amended return, Cantrell ignored it,” the court found.
Cantrell declined to comment on the ruling, referring questions to his attorney, John Ponseti, who could not be reached Tuesday.
Cantrell, whose ex-wife was removed from the case, noted the dispute in a candidate questionnaire when he ran last year for the seat occupied for nearly four decades by former Magistrate Judge Gerard Hansen.
Cantrell prevailed in the race, winning 57 percent of the vote in a race against former public defender Mark Vicknair. As magistrate judge, Cantrell makes $130,000 a year.
Follow John Simerman on Twitter, @johnsimerman.