ATLANTA (AP) — The IRS investigated a tax break that saved Gov. Sonny Perdue about $100,000 on a Florida land deal, a state lawmaker who once was his lawyer revealed Wednesday.
State Rep. Larry O'Neal, a leading candidate to be speaker of the House, said that following the 2006 election the IRS "sent a team of federal auditors to conduct a full forensic audit of every aspect" of the tax break included in legislation that O'Neal authored.
In an e-mail to the House Republican caucus that was obtained by The Associated Press, O'Neal said he was exonerated by the multi-week, on-site examination. Perdue owed no additional taxes after the probe, O'Neal said.
Perdue's spokesman, Bert Brantley, said O'Neal's letter "speaks for itself" and declined further comment.
In 2005, O'Neal was working as Perdue's lawyer and also serving in the Georgia House. At the time, he sponsored a sweeping bill that saved the governor about $100,000 in taxes on land he purchased in Florida.
Part of the legislation — which provided a tax deferral to profits from land sold in Georgia if it is then used to buy land elsewhere — was made retroactive to 2004. That effectively covered Perdue's sale of family land in Georgia in 2004 and his purchase of property in Florida, near Disney World, from a wealthy Republican developer later that year.
Perdue signed the bill in April 2005 but says he did not know he would benefit. The retroactive provision saved Perdue about $100,000 in state capital gains taxes
The tax break was the focus of a 2007 ethics complaint against O'Neal that was dismissed. O'Neal no longer serves as Perdue's attorney.
IRS spokesman Mark Green said the agency's disclosure rules prevent him from commenting on the investigation. He could not say if it had been closed or was still pending.
O'Neal did not return phone calls seeking additional comment on Wednesday.
In the e-mail, O'Neal said Perdue recently gave him permission him to talk about the matter, which had become an issue in his bid for House speaker. He said legal ethics had prevented him from discussing the probe earlier.
"At some point, even an old politician like me is entitled to have his name cleared, especially when the IRS has literally torn this whole matter apart and said it was clean," O'Neal wrote.
The House Republican caucus is set to vote Thursday on a nominee to replace Glenn Richardson as speaker. Richardson is set to step down Jan. 1 after a failed suicide attempt and allegations by his ex-wife of an affair with a lobbyist.