IRS: Political activist Hughes left millions in unpaid taxes

Conservative powerbroker Ralph Hughes, who spent millions of dollars promoting his anti-tax, small government causes and his favored political candidates, died owing the federal government tens of millions of dollars in taxes, according to the IRS.

The agency has filed a claim with Hughes' family trust seeking more than $69 million in unpaid income and business taxes and interest for the years 2003 to 2007.

Hughes' beneficiaries - his widow and two of his three children - are contesting the IRS claim, arguing Hughes paid millions in taxes.

After Hughes died at age 77 on June 27, 2008, Hillsborough County commissioners voted to rename the county's Moral Courage Award for him. The decision was controversial, with detractors accusing commissioners of repaying their benefactor and injecting politics into what was supposed to be a nonpartisan award.

In light of the IRS allegations, one commissioner said today that it may be time to revisit that vote.

Hughes, who owned the concrete products company Cast-Crete, helped shape the course of county politics by picking candidates he liked and backing them with advice and money. He aggressively supported county commissioners Jim Norman and Ken Hagan, as well as former commissioners Brian Blair and Ronda Storms. Critics accused him of essentially buying a majority of the commission.

Hughes believed the county wasn't fiscally conservative enough, so much so that he underwrote a $150,000 study into the county's spending.

Now Hughes' own finances are being called into question by the Internal Revenue Service, which last month filed a claim against the Ralph Hughes Revocable Family Trust. The trust was established to distribute Hughes' estate to his widow, Betty, and two of his three children, Shea Hughes and Shaun Crawford.

A third child, Szan Hughes, and three stepchildren were intentionally left out of the will, according to court documents.

Shea Hughes said he doesn't know enough about the IRS claims against his father's estate to discuss it in detail.

Court documents indicate a portion of the tax claim relates to Ralph Hughes' personal income, but Shea Hughes said he thinks it all relates to his father's business dealings.

"I believe it all is rooted from the corporate side and some audits going on with Cast-Crete and the IRS," he said. "My dad paid every dime that he owed personally and always would and always has."

Shea Hughes, his mother and sister, Shaun Crawford, filed a lawsuit June 8 asking that money from the estate be distributed immediately.

"Without distribution of income and/or principal, Betty Hughes will be, or may become, destitute," the complaint states. The suit seeks at least $500,000 immediately for Betty Hughes and $500,000 for Shaun Crawford.

Ralph and Betty Hughes lived in Temple Terrace before moving into a $3 million, 8,800-square-foot waterfront home in South Tampa in 2007.

Lawyers David H. Simmons and Bart R. Valdes, who represent the beneficiaries, also have filed a lawsuit against the federal government seeking to be compensated nearly $150,000 for their work.

Before the IRS filed its claim, the trust paid some money to Betty Hughes for living expenses, the lawyers said.

Court papers estimate the estate to be worth more than $30 million, in addition to Hughes' stock in his company. The attorneys said they could not disclose the value of the company stock.

According to an IRS "proof of claim" attached to court papers, the government asserts Hughes owes personal income taxes in amounts ranging from $555,031 for 2007 to $4.7 million for 2006.

More than $10 million is owed in personal income taxes, as well as $2.3 million in interest for that money, the IRS said.

The agency also is seeking taxes related to Hughes' business in amounts ranging from $3.9 million in 2004 to $24.4 million in 2006, for a total of $54.4 million, with no interest sought for those taxes.

The lawyers for Hughes' beneficiaries said they are challenging both the IRS' right to seek the taxes from the family trust and whether Hughes owed the money in the first place.

"There's certainly a dispute as to whether there's any debt owed," Simmons said. "He paid all of his taxes; the estate paid all of its taxes, as far as we're concerned."

Former county Commissioner Joe Chillura, an ideological soul mate and longtime friend of Hughes, said the IRS allegations are surprising.

"I've never known him to do anything beyond the law," Chillura said. "I've always known him to be very aboveboard."

Norman, who proposed renaming the Moral Courage Award, said of Hughes: "I know the man as just being honorable and paying all his debts; he was the most honorable guy I ever met.

"But as far as IRS and what they've got ... I would want to know the facts of what is going on," he said. "Is this a corporate battle that's going on, or is this something between the IRS and his company? Or is this his personal business?"

Norman said he would have to see proof that Hughes cheated on his taxes before considering making any changes to the Moral Courage Award.

But Hagan, one of the five commissioners who voted to rename the award, said the decision may need to be revisited.

"At the time, I felt Mr. Hughes met the definition of moral courage with respect to challenging government, not only in Hillsborough County but in Temple Terrace as well," Hagan said. "But if these allegations are true, then we should consider renaming the award."