Property problems for Charles Rangel
Friday, September 05, 2008
Real estate tax troubles cross all political party lines.
This time it's the chairman of the Ways and Means Committee, the panel which is charged with originating all tax legislation.
Committee Chairman Charles Rangel (D-N.Y.) apparently didn't report $75,000 in rental income from a villa he has owned in the Dominican Republic since 1988. The oversight was on both his federal and state tax returns, according to a story in today's New York Times.
The tax nonpayment issues obviously are the big issue. But the news could not have come at a worse political time for Rangel's party. Just a few weeks ago, attention was focused on John and Cindy McCain's multiple properties, as well as an earlier property tax issue with one of those pieces of real estate.
Now, as the post-convention presidential campaigns move into high gear, taxes are going to be a major topic. And the failure to meet personal tax obligations by Rangel, the top Democrat on the House tax-writing committee, is going to be a definite subtext in all tax talk by the GOP. Or, more likely, to show up in campaign ads.
As the Times put it:
Whatever his legal exposure, the tax problems present a political embarrassment for Mr. Rangel, a Harlem Democrat who has sat on the Ways and Means Committee since 1975. As chairman, Mr. Rangel has pushed for higher taxes on the wealthy, unveiling a $1.3 trillion proposal last year that businesses denounced as a threat to the economy.
What the Congressman didn't know: Lanny Davis, an attorney for Rangel said the congressman "would most likely file amendments to his tax returns for the years in question." Ya think?
Davis also told the New York Times that Rangel will probably have no federal tax liability because he considered the villa an investment rather than a vacation home, and was therefore entitled to deduct depreciation on the property, as well as taxes the resort management paid to the Dominican Republic.
That might help Rangel as he clears up his tax filings in connection with the property, but again, in this political climate, expect the GOP to use it to show that their opposition's primary tax legislator is rich enough to own an island resort home and careless enough to neglect his tax duties in connection with it.
But to me the most disturbing revelation in the story is Davis' statement that Rangel did not realize he had to declare the money as income.
Did not realize …
That's got to make you wonder just how many other things about the tax code do all our Representatives and Senators not know or understand?
Talking taxes and other stuff: The Times today also looks at what was said at the two conventions, specifically the key words that speakers used to drive home their party's main themes.
In a graphic feature, the paper lists the number of times particular words were used per 25,000 words spoken.
"Change" was the word
On the Republican side, however, "tax" or "taxes" were brought up 42 times per 25,000 words spoken in St. Paul. However, "God" still edged out discussion of what must be, in Biblical terms, rendered unto Caesar.
Fixing filing mistakes: If you've got some tax cleaning up to do, hopefully not to the extent that Rangel does, you can file Form 1040X to amend an incorrect return. Details on the process here.
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