Monday, November 24, 2008

Another Day, Another Rangel Tax Revelation

photo via the NY PostThanks Harlem, New York voters for voting Charles Rangel (D) back into office without bothering to note the swirling criminality surrounding him. You've managed to reelect a tax cheat who's been shorting the government (take your pick of New York City, New York State, District of Columbia, and the federal government) for years on end, and yet doesn't think that this diminishes his capacity to head the very committee charged with writing tax laws for the country.

In fact, his fellow Congressmen don't seem to think anything is wrong with this situation either. Neither does the Democratic party leadership, which is going along with this mess, despite admissions by Rangel that he's shorted New York and the IRS on rental income from his Punta Cana villa.

So, following revelations over the weekend that Rangel may not even be eligible to be your Congressman by claiming a homestead tax benefit in the District of Columbia for years, which is available only to residents of the District and would put Rangel's rent stabilized apartments in New York City in jeopardy, the New York Times takes note and offers up a concise history of Rangel's current mess:
WASHINGTON — Representative Charles B. Rangel’s legal team is reviewing his tax records to determine whether the congressman received a homestead exemption on a house he owned in Washington while living in several rent-stabilized apartments in New York City.

The situation is potentially troublesome for Mr. Rangel, a Harlem Democrat who is already the subject of a wide-ranging internal House investigation stemming from an assortment of ethical concerns.

Rent laws in New York City and the state require that tenants occupying rent-stabilized apartments use those units as their primary residences. At the same time, the District of Columbia’s Office of Tax and Revenue extends the homestead tax deduction only to properties that are primary residences.
So, which is it? Is Rangel a resident of DC or New York? That's a factual determination, and is generally based on the number of days that Rangel is using the property as his residence. In New York, one must maintain a permanent place of abode in New York State and spend more than 183 days in New York to be treated as a resident for tax purposes. To claim a change of domicile, the taxpayer must show via clear and convincing evidence that the domicile has changed. (NY Tax Law 603)

The District of Columbia has residency requirements that are virtually identical to the New York law.

In either case, he's violating the law of the other state, and the question then becomes whether he did so to defraud the government. Claiming that he didn't know the laws is not going to sit well with the tax authorities, and it's even more farcical given that he's supposed to know tax laws generally and how they operate. It calls into question his character and judgment, let alone his fitness to be the chair of the Ways and Means Committee.

The New York Post further notes that the DC law explicitly prohibits Congressmembers from taking the tax break.
Here's a good rule of thumb: If Charlie Rangel owns it, you can bet the tax man's not getting his fair share.

As The Post reported yesterday, the Harlem congressman - who chairs the powerful House Ways and Means Committee - took a "homestead" property-tax deduction on a house he owned in Washington, DC, until 2000.

Problem is the deduction only applies to a home that is an individual's "principal place of residence" - and the law explicitly bars members of Congress from taking the break.

Besides, it's not as if Rangel has exactly given up on New York living: It came out earlier this year that the congressman occupied four rent-stabilized apartments in a Harlem building - one of which he used, also illegally, as a campaign office.
Another Congressional ethics complaint is being filed against Rangel for his tax break on the DC property.

Instapundit links. Thanks!

The Times now decides to dig deeper on Rangel's issues with CUNY. This might have been useful, say, a few weeks before the November elections.
Representative Charles B. Rangel has helped raise $11 million for a City College of New York school of public service to be named in his honor. In recent months, as questions have emerged about his fund-raising, he has insisted that he has kept his efforts to attract donors scrupulously separate from his official duties in Congress.

But Congressional records and interviews show that Mr. Rangel was instrumental in preserving a lucrative tax loophole that benefited an oil-drilling company last year, while at the same time its chief executive was pledging $1 million to the project, the Charles B. Rangel School of Public Service at C.C.N.Y.

The company, Nabors Industries, was one of four corporations based in the United States that were widely criticized in 2002 and 2003 for opening offices in the Caribbean to reduce their federal tax payments. Mr. Rangel was among dozens of representatives from both parties who bitterly opposed those offshore moves and, in 2004, pushed unsuccessfully for legislation to make the companies pay more tax.
This whole situation reeks. (Added the photo at top)

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