School official in Pinellas still fighting taxes

The transportation director continues his dispute with the IRS, filing motions and pursuing lawsuits.

By KELLY RYAN

© St. Petersburg Times, published January 18, 2001

For the three decades that Michael Fleming has worked in public schools, taxpayers have paid his salary and benefits.

But for more than four years, the Pinellas school district's transportation director has been fighting to avoid paying any taxes himself.

Fleming, 52, who manages a department with a $25-million budget and has been a primary decision maker in the county's plan to let parents choose their children's schools, is in a protracted fight with the Internal Revenue Service in federal and state courts.

He has represented himself, making arguments popular with tax protesters and seeking help from people who advertise their ability to fight the government from Internet sites.

But Fleming, who has been on paid administrative leave from the school district since Nov. 13, told a bankruptcy judge in February 1999 that he is not a tax protester. He just wants the IRS to prove he owes taxes.

"The Internal Revenue Service has not gone beyond the burden of proof to say that I am a person that's liable," Fleming argued to U.S. Bankruptcy Judge C. Timothy Corcoran III.

The judge's response was swift.

"Well, that's utterly absurd," Corcoran said.

Fleming has lost his 1992 Isuzu Trooper and other personal belongings to IRS seizure. He rents an apartment and appears to own no real property. Although Fleming's school paychecks were eventually garnished by the IRS, court records indicate he still hasn't paid a tab of more than $55,000 that a judge ruled he owes.

Meanwhile, Fleming, who could not be reached for comment, awaits the outcome of a district investigation focusing on him and Nancy Blackwelder, who oversees bus routes and has been on paid leave since Oct. 26.

State law prevents district officials from discussing ongoing investigations into employees, so they will not say whether the investigation is related to Fleming's dispute with the IRS or his 1997 bankruptcy filing.

Superintendent Howard Hinesley said Wednesday that he learned about Fleming's dispute with the IRS in July 1997, when Fleming sent a letter and affidavit to the district's payroll department. In the letter, Fleming asked the district to stop withholding taxes from his salary because of his "exempt status with respect to Federal Income taxes."

"The IRS cannot penalize you for merely obeying the law," he wrote. "A Citizen, however, can sue you for taking his or her private compensation, contrary to the law, and against his or her consent and the IRS will provide you no protection or immunity."

The IRS responded on Aug. 7, 1997, urging the district to "disregard (or continue to disregard)" Fleming's request. Hinesley said the district followed the IRS' direction.

Fleming made a similar request late last year; again, it was denied.

Hinesley said he has consulted with a tax attorney who advised that an employee cannot be disciplined for having a private dispute with the IRS.

In the next few weeks, the district expects to finish its investigations into Fleming and Blackwelder. District policy dictates that employees should not be put on paid leave longer than 10 days, but Fleming and Blackwelder have been on leave more than two months.

"With rare exceptions, we follow the 10 days," said district lawyer Jackie Spoto. "This is a unique situation. We just considered this in the best interest of the district to do a thorough investigation."

Their absence comes at a critical time.

Nearly 3,000 students are being assigned to new schools this fall as part of the district's two-year rotation. And in fall 2003, students will no longer be assigned to schools but will be able to choose the campuses they attend.

The move to choice will require a more complicated, more expensive transportation system. Blackwelder and Fleming have been the chief architects of that system.

Hinesley said their absence has not affected plans for choice because the district has been waiting for results of a parent survey this spring. He did acknowledge that the department is "in need of help," so he is eager for the investigation to be done.

A message left early Wednesday at Fleming's home was not returned; later in the day, the phone had been disconnected. Lawyer Peter Meros, who is representing Fleming in the district investigation, said he could not comment on the investigation or the IRS dispute.

But court filings in Fleming's ongoing bankruptcy case reveal that Fleming sees himself as a man who simply doesn't have to pay taxes and is a victim of "overzealous, perhaps renegade IRS agents," he said in the filings. "It has become clear to me through personal experience that, because the IRS cannot prove its fraudulent allegations of a tax liability against me, it must resort to the libelous and scandalous epithet of 'bad illegal tax protester."'

Corcoran, the bankruptcy judge, told Fleming he would not tolerate "mind games using tax protester rhetoric."

When Fleming initially filed for bankruptcy, he listed Sears and the IRS as the creditors, with $16,374.51 owed to the IRS. Since that time, the IRS has filed several claims against Fleming for much larger amounts.

After the IRS started trying to collect from him, Fleming filed late tax returns for four years the IRS said he had not filed. On those returns, court documents say, Fleming listed his wages as zero. His current annual salary is $79,473.

To prove that he is not liable for taxes, Fleming hired Ohio consultant Ben Houck, whose Web site asks, "IRS breathing down your neck?" For $50, Houck will "decode" a person's IRS master file, the Web site says. Fleming said Houck decoded his file in July 1997 and determined that Fleming was classified "MFR-01," which means "one not required to file or mail."

U.S. Bankruptcy Judge Paul M. Glenn dismissed the case June 30, 2000, saying Fleming had failed to make timely payments to his trustee. Fleming disputed that, saying the U.S. Postal Service lost a money order. Glenn also ruled that Fleming failed to prove he is exempt from income taxes.

Yet, the case goes on.

Fleming continues to file motions, appealing various decisions. He also is pursuing lawsuits against the IRS in state and federal court.

- Times researchers Cathy Wos and Kitty Bennett and staff writer Graham Brink contributed to this report.

ANNUAL SALARY: His current annual salary is $79,473. Court documents say that on IRS returns, he has listed his wages as zero.

HIS JOB: The Pinellas school district's transportation director manages a department with a $25-million budget. Nearly 3,000 students are being assigned to new schools this fall. The move to choice will require a more complicated, more expensive transportation system, of which Fleming is the chief architect.

IRS LOSSES: 1992 Isuzu Trooper seized by the IRS. Paychecks were eventually garnished. Records show he owes more than $55,000.

Recent coverage

Schools transport chief put on leave (November 20, 2000)

School official on paid leave (November 3, 2000)

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