Today’s winner is New York Democratic Congressman Charles Rangel. He gets the award for the following–
Representative Charles B. Rangel has earned more than $75,000 in rental income from a villa he has owned in the Dominican Republic since 1988, but never reported it on his federal or state tax returns, according to a lawyer for the congressman and documents from the resort.
Mr. Rangel, chairman of the House Ways and Means Committee, which writes the federal tax code, bought the beachfront villa at the Punta Cana Yacht Club and has received twice-yearly payments from the resort, which rents the property for $500 or more per night.
Records from the development, now called the Punta Cana Resort and Club, indicated that Mr. Rangel’s rental profits varied from year to year, from $2,700 in 2004 to $7,600 in 1994.
A lawyer for Mr. Rangel, Lanny Davis, said on Thursday that the congressman would most likely file amendments to his tax returns for the years in question.
But Mr. Rangel will probably have no federal tax liability, Mr. Davis said, 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.
One of the leading members of Congress who helps set federal tax law not paying their taxes properly. Taxes must only be for the little people.
I think Lanny Davis is being overly optimistic. If Rangel received income from the rentals, and didn’t report it, He’s going to be on the hook for both back taxes and penalty from the IRS.
Who does the congressman blame for the tax discrepancies?
Mr. Davis said the congressman did not realize he had to declare the money as income, and was unaware of the semiannual payments from the resort because his wife, Alma, handled the family finances and conferred with their accountant, John Viardi, on tax matters.
I wonder how Alma Rangel feels about taking a bullet for her husband. For not reporting his income properly, Congressman Charles Rangel Chairman of the House Ways and Means Committee is today’s Knucklehead of the Day.
Hat tip- Betsy
Update- Rangel’s tax problems may just be starting.Today’s NY Times reports that the mortgage interest on the villa was waived for more than a decade. Where can I get that kind of deal? Thank you to Wizbang commenter Corwin who pointed me to the more recent article.