Rep. Gates’ disclosure at odds with affidavit

State Rep. Mickey Gates, R-District 22, said Thursday that he couldn’t explain why his financial disclosure statement and charging documents filed after his June arrest showed different amounts owed to the state revenue agency.

The 2018 statement of financial interest he filed last month listed $13,812 owed to the Department of Finance and Administration as of the end of last year. Gates said it represents the remaining balance on the settlement he reached with the state following an audit of him and his promotional products company.

The statement said Gates has been paying

$1,500 a month since late 2016 toward $54,000 in taxes and penalties owed on the settlement, noting that payments are “Never missed!” and “Never Late!” The 2017 disclosure statement Gates filed in January 2018 listed

$40,000 owed to the state for unpaid taxes.

The affidavit the Arkansas State Police filed in support of Gates’ arrest last year on six felony counts of failing to pay or file a tax return said as of June he owed $259,841 in taxes, penalties and interest. A July 29 trial date was set earlier this year after Gates pleaded not guilty in October.

The state has two active tax liens against Gates on file at the Garland County circuit clerk’s office, a $54,325 claim for the

2007 tax year and a $159,882 one for the 2014 tax year.

No tax returns for Gates were found when DFA searched its system in response to a subpoena issued by the special prosecutor appointed to the case, according to the affidavit, which said records in DFA’s system go back to 2003.

“They testified under oath that I never filed a return,” Gates, referring to the state police investigator’s sworn statement, said. “It’s amazing that I would send them over $1,500 a month for no reason at all. It’s interesting that I’ve paid them over $30,000 and never filed a return. I am one generous person.”

The affidavit said Gates told the investigator in June that he had not filed a return for the 2015-17 tax years because he didn’t know how much he owed in taxes, and that he thought DFA had been completing tax returns on his behalf prior to 2015.

Gates’ attorney, Jeff Rosenzweig, told The Sentinel-Record in January that his client was acting in good faith, explaining that DFA was determining how a loss claimed by Gates’ business affected his tax liability when he was arrested in June.

Rosenzweig said internal DFA correspondence he requested through the discovery motion he filed in December will corroborate the good faith defense, showing Gates’ failure to file returns was done at the instruction of the state.

The six felony counts Gates is facing correspond to the 2012-17 tax years, as the state’s Tax Procedure Act has a six-year statute of limitations on prosecuting tax offenses.

Gates was elected in November to a third term representing east Garland and north Saline counties in the state House.