Tuesday, December 07, 2010

Rangel Blames Staffers For Ethics Woes

Rep. Charles Rangel (D-NY-Censured) would like people to think that he didn't do anything wrong other than be too trusting of his staffers. That's a whole bunch of nonsense. He says his worst mistake was trusting his staffers.

That's quite the excuse Charlie. Blame the staff when you're the one ultimately responsible for the paperwork. You signed off on it.

Moreover, who are you blaming for being a tax cheat or for the use of a rent stabilized apartment as an office? No staff involved there. That's all on you - and you unjustly enriched yourself by not paying taxes for all those years on your real estate holdings and paying below market rents.

It is an interesting juxtaposition to see Rangel claiming that he did nothing wrong at a time when actor Wesley Snipes is being carted off to prison for a lengthy stay because of being a tax cheat. There are some significant differences in the two cases.

Snipes was a tax protester and his tax obligations were in the millions of dollars. He failed to file and pay taxes on $38 million in earnings going back to 1999. He claimed he was a non-US citizen and engaged in all manner of chicanery to avoid paying taxes. Snipes was sentenced to prison for three years because he was found to have willfully failed to file federal income tax returns under 26 U.S.C. § 7203. His codefendants were sentenced to even longer terms as they were involved in setting up and advising Snipes on his tax avoidance schemes. Snipes will be reporting to prison after his appeals were rejected.

Rangel's tax obligations were far less and didn't engage in overt tax avoidance as Snipes did. Rangel's problem is that he didn't declare his income from rental properties and did so for a decade all while being the guy running the committee that sets tax policy for the nation.

Snipes is getting what he deserves, and Rangel's tax problems have yet to be fully resolved. Rangel may end up doing no prison time, but may end up having to pay considerable penalties and interest.

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