Tommy the taxster - lobbyist Tommy Boggs

Tommy Boggs, a $400-an-hour super-lobbyist who has been helping Mercedes-Benz, BMW and other pricey import dealers fight the luxury tax, is having a little tax trouble of his own.

According to the Internal Revenue Service, Boggs and his wife Barbara owe back taxes to the tune of more than half-a-million dollars.

The case involves two enterprises Boggs operated on the side in the mid-'80s -- neither of which could exactly be called profit machines. In 1984 he purchased $1.97 million worth of medical equipment, putting $74,000 down, Boggs says in court documents filed with the U.S. Tax Court. He says he intended to make money leasing the equipment. Instead, for each of the years 1984 through 1988, the Boggses claimed six-digit losses, totaling more than $1 million.

The other case involves the Bozman Rose, a boat Boggs says he bought in 1983. The Louisiana-born lobbyist, an avid fisherman and boating enthusiast, maintains that he bought the 40-foot vessel, unlike his other boats, to charter out to fishing parties for a profit. Boggs asserts in his court filings that he felt his involvement in the boating industry also "would provide him with perspective and knowledge that would enhance his value to clients" and would increase his law practice income at Patton, Boggs & Blow by better equipping him for "representation of various clients related to the boating industry."

Alas, it was an ill-fated venture. Boggs says he did his accounting by the book, but that "due to unforeseen problems such as the lack of sufficient boat speed required on the Chesapeake Bay, the sinking of the Bozman Rose and similar catastrophes," he took some big hits. For the years 1984 through '87, Boggs claimed deductible losses of some $329,000 -- more than four times what he paid for the boat.

The IRS claims that both undertakings were "tax-motivated" -- in other words, that Boggs did not intend them as bona fide, profit-making ventures, a position staunchly denied by the Boggses' tax attorney Jon Flask. For the years 1985 through 1988, the agency says the Boggses underpaid their taxes by $530,000. Even if the businesses were meant to be profit making, the IRS says, the Boggses still deducted too much.

The burden of proof in the case is on the Boggses. "I believe that ultimately there will be no tax liability on Mr. Boggs's part," says Flask, adding that settlement negotiations with the government are about to begin. Should no agreement be reached, the case would go to trial later this year.

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