Delegate is ordered to pay $48,000 in payroll taxes for his law firm employees

April 11, 1996|By Dennis O'Brien | Dennis O'Brien,SUN STAFF

A state delegate must pay $48,000 in payroll taxes for employees who worked at his Hagerstown law firm in 1991 and 1992 while he was House majority leader, a state appeals court ruled yesterday.

Del. D. Bruce Poole, a Washington County Democrat who was House majority leader from 1991 to 1993, is personally liable for the taxes as a former partner and corporate officer in the firm of Snyder & Poole, the Court of Special Appeals said.

The taxes were not paid from December 1991 to November 1992.

The decision reversed Garrett County Circuit Judge Frederick A. Thayer III and upheld a 1994 Maryland Tax Court decision, which found that as a partner and corporate officer, Mr. Poole "exercised direct control" over the firm's assets.

Mr. Poole declined comment yesterday, saying he may ask the Court of Appeals, Maryland's highest court, to review the case.

In papers filed with the intermediate appellate court, Mr. Poole argued that he controlled only one-quarter of the law firm's assets and was so tied up with legislative duties that he did not become aware of the tax problems until April 1992, more than a year after they began.

Mr. Poole, who as a state delegate now earns $29,700 a year and was paid $50,000 by the firm, said he left the operations up to his former partner, George Snyder.

Until he resigned from the firm Nov. 13, 1992, Mr. Poole fought to save money and pay the withholding taxes by cutting costs, he said in legal briefs. He said Mr. Snyder wanted to solve the firm's financial problems by increasing revenue and expanding.

"Because Snyder held 75 percent of the corporation's stock there was absolutely nothing Poole could do to override these decisions," Mr. Poole wrote.

But a three-judge panel noted that Mr. Poole was "an officer of Snyder & Poole" who "engaged in negotiations to purchase the firm's computer equipment, personally guaranteed the firm's debt, participated in long range planning decisions, had authority to sign checks and had 25 percent interest in the firm."

Mr. Snyder also is liable for the back taxes.

The firm was formed in the late 1980s and at its peak employed 14 lawyers and had revenue of $2 million, the opinion said. But by 1991 the firm was $400,000 in debt and stopped paying state payroll taxes, according to court papers.

"As fate would have it, Snyder & Poole's success and growth faded as rapidly as it had blossomed," the court said.

Pub Date: 4/11/96

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