The Taxman Cometh For Rep. Rangel

Rep. Charles Rangel (D-NY) has indeed thought he was above the law. He flouted regulations concerning ownership of his rent stabilized apartments and now we learn that he failed to report $75,000 in income earned from that villa down in Punta Cana.

Nice.

He has no problem taxing the rich and playing class warfare, but god forbid anyone question his own off-the-books income in violation of state and federal law. His lawyer says that they'll be able to claim depreciation and wont incur any additional tax liability once amended returns are filed.

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.

Representative Charles B. Rangel said through his lawyer that he did not know that he had to report the rent he received on the villa as income.

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.

Mr. Davis said Mr. Rangel’s accountant believed he would most likely owe back taxes to the state and New York City.

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.

New York will definitely want its cut of the $75,000 in taxes and interest and penalties.

His constituents gave him slack over his ownership of four apartments. I expect them to do the same here, even though they shouldn't. Rangel takes advantage of the system and thinks he is above it.