Senator Jim Justice, Republican of West Virginia, and his wife have agreed to pay the Internal Revenue Service more than $5 million to cover unpaid taxes from 2009, settling part of a legal fight he has claimed is politically motivated.
The agreement, filed in federal court on Monday, came just hours after the I.R.S. sued Mr. Justice and his wife, Cathy, accusing them of having “neglected or refused to make full payment” of their taxes for 2009. In the lawsuit, the I.R.S. said that as of early August, the Justices owed over $5.16 million in back taxes and interest from that year.
Under the settlement, the Justices have agreed to pay that amount, plus any additional interest they accrue before the bill is paid in full. The filing, in the U.S. District Court for the Southern District of West Virginia, did not give a deadline or schedule for payment. The agreement, known as a consent judgment, was still awaiting a judge’s signature on Tuesday morning.
A spokesman for Mr. Justice’s Senate office did not respond to a request for comment.
Last month, Mr. Justice asserted during a news conference that the 2009 tax assessment against him and his wife, which was levied in 2015, and other assessments since then, were politically motivated. “If you don’t think these are political moves, you’re crazy,” he told reporters. He suggested that President Joe Biden’s administration might have targeted him during his 2024 run for the Senate, but did not offer specifics.
A spokeswoman for Mr. Biden declined to comment on Mr. Justice’s claims. Mr. Biden was president when the I.R.S. issued more recent tax assessments against the Justices, but he was the vice president in 2015, when the initial assessment for missed 2009 taxes was issued. He had left the White House by the time the I.R.S. filed tax lien notices against the Justices earlier this year for being in arrears in multiple tax years.
In 2009, Mr. Justice was a private citizen with holdings in the coal industry. He did not explain why he believed he would have been a target of tax officials in the Obama administration. In 2015, he began a successful campaign to become West Virginia’s governor as a Democrat, six months before the I.R.S. assessed that he owed back taxes for 2009. Four years later, after building an alliance with President Trump, Mr. Justice ran for re-election — and won — as a Republican.
Mr. Justice also said that he was pursuing the I.R.S. for what he claimed, without providing evidence, were about $40 million in outstanding tax refunds. He predicted that he and his spouse would ultimately “end up with significantly more dollars from the I.R.S. than what we owe the I.R.S.” He added: “It’s just a situation we’ve got to go through.”
Mr. Justice, who served was governor from 2017 until he took office as a senator in January, got into politics after a long career running a family coal business that owned dozens of mines in several states.
It was not immediately clear why the government reassessed the Justices’ tax liability for 2009.
That year, Mr. Justice sold one of his coal companies, Bluestone Coal, to Mechel, a Russian coal and steel producer, for $436 million in cash plus shares, and he has suggested the deal he triggered an I.R.S. audit. (He bought back Bluestone six years later.) Also in 2009, Mr. Justice bought a luxury resort in West Virginia, the Greenbrier, out of bankruptcy. The resort was known for hosting retreats for Republican lawmakers.
Tax and debt issues have dogged Mr. Justice in recent years. He and his companies have been accused of dodging a number of bills from banks and other creditors. Banks tried to garnish his wages as governor, and he auctioned off various tax-delinquent properties; last year a federal judge in Delaware ordered Mr. Justice to sell six of his companies to settle other outstanding debts, according to reports in West Virginia news outlets.
His trouble with the I.R.S. might not be over. Monday’s agreement covers only 2009, but tax liens filed by the I.R.S. two months ago listed three other years for which the government claims the Justices owe money. The liens, totaling over $8 million, were listed in a public database for Greenbrier County, W.Va., and were reported previously by Politico.
One filing said the I.R.S. made its initial 2009 tax assessment against the Justices on Nov. 25, 2015, determining then that they owed just over $3 million. That filing also said they owe almost $5 million for 2017 and a much smaller amount — just under $11,000 — for 2022. A separate lien naming Mr. Justice alone said he owed roughly $24,000 for 2017.
In his remarks to local news outlets last month, Mr. Justice claimed that the I.R.S. had arrived at the $8 million figure largely out of interest and penalties after an audit found that he “should have paid a few more dollars than what I paid” in 2009.
Karoun Demirjian is a breaking news reporter for The Times.
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