IRS Admits Jarvis Lien a Mistake

Moving quickly to correct an error that posed a potential political problem for congressional candidate Judy Jarvis, the Internal Revenue Service has admitted that it inaccurately held a $41,000 lien against Jarvis for a debt relating to her former business.

In a letter sent Wednesday to Jarvis, IRS officials apologized for the “concern and inconvenience we caused you by the erroneous filing” of the lien against her, which stemmed from delinquent federal income taxes for a nurses registry company Jarvis operated from 1977-87, a debt that she had argued, accurately, had been paid years ago.

“I’m thrilled this thing is over,” said Jarvis, the Republican candidate in the 49th District. “I was certain it was a mistake all along, but it’s nice to have that verified. I was really impressed with the way the (IRS) moved very quickly to take care of it.”

Indeed, when the controversy over the lien surfaced last week, both IRS officials and Jarvis’ accountant had said it could take up to two months to resolve the dispute.

While Jarvis maintained that she had paid off more than $60,000 in liens in the mid-1980s--an argument she bolstered with canceled check receipts and a previous IRS letter stating there was “no debit balance” relating to her former company--IRS records and county documents showed that $41,350.19 was still owed.

Given Jarvis’ proud trumpeting of her success in parlaying a $5,000 loan into a $1-million-a-year business--an achievement she has cited throughout her race as emblematic of what she hopes to accomplish in Congress--the financial dispute loomed as a major campaign issue.

This week’s letter from the IRS, however, “makes this a non-issue,” Jarvis said.

“The real issue is how when you’re in business and encounter problems, it’s important to take personal responsibility and correct the problem,” said Jarvis, who opposes Democrat Lynn Schenk and two minor-party candidates in the Nov. 3 contest. “This wasn’t my mistake, but it was my company, so I took the responsibility.”

From the start, Jarvis had insisted that the tax problem stemmed from a former accountant’s errors and failure “to file in a timely manner” at various points throughout the early 1980s. Although terming herself “livid, just furious” over the resulting penalties, Jarvis insisted that the debt had been gradually paid off in full.

In his letter to Jarvis this week, IRS district director Jesse Cota confirmed her account.

“We apologize for any distress or inconvenience our actions, or delay in action, may have caused you,” Cota wrote. “Our review of (your) business account determined the liability was satisfied (in 1985). The records show a lien was filed . . . and should have been released when the account was fully satisfied. The lien was not released and was erroneously refiled.”

Jarvis sold her company, California Nurses Bureau Inc., which operated as a middleman between critical-care nurses and hospitals, in 1987.

On Thursday she repeated her assertion that the episode will not damage her campaign.

“The real success story here is how many businesses would have folded under this kind of problem, but we came through it and went on,” Jarvis said. “I think people might even see that as a plus.”