No jail time for former Rep. Joe Armstrong

A federal judge on Wednesday spared former state Rep. Joe Armstrong from a prison term, calling his failure to pay taxes on a windfall from a sin tax hike aberrant behavior in an otherwise “exemplary” life, reports the News Sentinel.

Senior U.S. District Judge Thomas Phillips ordered Armstrong to spend six months under house arrest and perform 300 hours of community service.

He will be on probation for three years and must pay a $40,000 fine, repay the IRS nearly $100,000 in unpaid taxes and an undetermined figure to cover the government’s cost of prosecuting him.

“It was essentially an isolated incident,” Phillips said. “Until this occurred, (Armstrong) has led an exemplary life.”

Armstrong failed to tell the IRS he made a windfall of $321,000 in an under-the-table deal to profit from a boost in a sin tax for which he voted in 2007.

Phillips took direct aim at the Tennessee Legislature for allowing lawmakers to profit from legislation they vote to approve. The judge agreed what Armstrong – and many other legislators – did in profiteering courtesy of a favorable vote wasn’t a crime, but Phillips said it was criminal nonetheless.

“In this court’s opinion, it was unethical and immoral, but not illegal,” he said.

Armstrong, a Democrat who represented East Knoxville’s 15th District for nearly three decades, was convicted last year of filing a false income tax return in connection with a deal he struck with Knoxville tobacco wholesaler Tru Wholesale to buy cigarette tax stamps for him at the 2006 rate of 20 cents per pack and then sell them after a 42-cent hike went into effect in 2007. Armstrong voted for the tax hike.