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Pols Update: According to a report from Lynn Bartels at the Denver newspaper, Watson claims to have paid back a portion of his outstanding taxes and disputes the number and amount of liens levied against him.

That certainly changes the story, but unfortunately for Watson, it won’t change the potency of the attack.

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Bad news for Republicans in the race against Democrat Dan Kagan and what many consider their best House pickup opportunity statewide.

From Fox31’s Eli Stokols:

DENVER – The Republican candidate looking to unseat a Democratic state representative, in a race that could determine which party controls the statehouse, owes nearly $280,000 in unpaid property taxes, FOX31 Denver has confirmed.

Brian Watson, a businessman who is running to unseat Rep. Daniel Kagan, D-Denver, has Republicans excited about their chances to win a Denver district that was re-drawn in their favor during reapportionment earlier this year; and state GOP chairman Ryan Call considers Watson a possible rising star in the party.

But FOX31 Denver has found that there are nine tax liens pending against Watson for unpaid taxes on various properties that add up to $279,657.

An outside political action committee supporting Kagan, the Colorado Accountable Government Alliance, is now highlighting Watson’s unpaid property taxes in a new mailer.

Kagan himself told FOX31 Denver he has had nothing to do with the mailer and hasn’t been raising the issue when he talks with constituents.

Three of the liens, for a total of $147,506, are on Aspen Moving and Storage, which Watson explains in a 2010 letter to investors, “suffered approximately a 70 percent decline in income between 2008 and 2009.”

The timing of this particular revelation is going to hurt. Ballots go out in a few weeks, and you better believe the “Colorado Accountable Government Alliance” and other independent expenditure groups are going to hit Watson hard on this issue — even if Kagan doesn’t touch it himself.

This is one of those issues that’s precisely as bad as it looks. Watson has been so successful in his bid thus far because he’s been able to frame his campaign around his business record. This tax issue, then, calls his number one qualification into question. On his website, Watson discusses his desire, if elected, to create “predictable and reasonable regulation and fair taxation.” Seems like the Republican isn’t really the best guy to be discussing what’s fair, is he?

Even worse, as Stokols points out in his article, Watson defends the debts as resulting from the economic downturn and “mismanagement” in the company that his firm, Northstar Commercial Investments, acquired. Fair enough. That doesn’t change the fact that Northstar contributed $500 to the Colorado Republican Party. The investment firm, it would seem, has money enough to facilitate Watson’s candidacy but not enough for taxes. Hell, Watson himself wrote a check to a small donor committee “supporting Republican candidates and Republican members of the Colorado House of Representatives for election and reelection.”

If you’re a candidate for public office, and you owe back taxes, it’s probably not a good idea to be writing checks to anyone or anything other than the IRS.

At the top of the ticket, Mitt Romney has already driven the issue of tax responsibilities into the national spotlight. With this development, Watson’s going to have to defend his own background down ballot as well.

Dan Kagan couldn’t have gotten better optics if he had asked for them.