District 1 supervisor candidate Margaret Gilmer is the subject of a federal tax lien that has showed more than $190,000 in individual income taxes owed, including interest and penalties, according to notices filed by the Internal Revenue Service in Warren County Chancery Clerk’s Office in 2005.

Totals show Gilmer, 63, and her husband, Mabrie L. Gilmer, being asked to pay as much as $194,867.78 in federal income taxes from 1997 to 2003.

Tuesday, Gilmer said the matter stems from a clerical foul-up on the part of the IRS and the debt has already been reduced by nearly half. She also said the original demand was calculated at $30,000. The IRS now shows $98,514 is owed and Gilmer said letters were written last month asking for removal of interest and penalties to make the debt $59,667.

“We’re getting this resolved,” Gilmer said, adding the experience has revealed a “broken” tax system.

Gilmer, general manager of Vicksburg Factory Outlets since its opening in 1995, said the lien stems from income received in 1998 from the mall’s former management firm, Huff LLC of Alabama, as it was refinancing the mall and compensating local investors.

Gilmer is one of 46 local investors comprising Vicksburg Land Partners, which owns the shopping center at 4000 S. Frontage Road. Its day-to-day management was sold to Newport Beach, Calif.-based Craig Realty Group in June 2005.

Proper forms for reporting the income from the Huff settlement with investors did not arrive on time, she said, which eventually led the IRS to determine the Gilmers owed self-employment taxes.

“How they had us self-employed, I don’t know,” said Gilmer, who is also a licensed Realtor. She faces Republican incumbent David McDonald and independent Tony Ford in the Nov. 6 general election.

Appeals processes with the IRS on liens — filed in court records according to the Internal Revenue Code — usually take place within a 10-year statute of limitations, during which the agency often settles tax debts for less than what the assessments showed on the lien.

On taxes assessed on or after November 6, 1990, the lien generally becomes unenforceable 10 years after the date of assessment. For taxes assessed on or before November 5, 1990, a prior version of federal tax law provides for a limitations period of six years after the date of assessment. Various exceptions may extend the time periods.

When reached, IRS officials said tax returns of all types are unique and must be taken into account individually to examine a taxpayer’s claim.

“Each case is handled differently,” IRS spokesman Mark Green said, adding “a whole gamut” of factors can come into play when self-employment taxes are misapplied, as Gilmer said.

About 13,000 individual income tax returns for tax year 2006 are expected to be chosen at random and audited this year from various income categories, according to published reports.