Sunday, November 23, 2008

Rangel's Tax Cheating Heart

Rep. Charles Rangel, a Democrat who won reelection handily from his constituents in Harlem and was reelected by his fellow Congressmen to head the House Ways and Means Committee, continues to have a taxing situation on his hands.

He simply doesn't like to pay the taxes he rightfully owes. He doesn't report income, and takes advantage of tax breaks he had no business taking. That has added thousands to his tax bill, and this latest revelation will add still more:
Harlem Rep. Charles Rangel took a "homestead" tax break on a Washington, DC, house for years while simultaneously occupying multiple rent-stabilized apartments in New York City, possibly violating laws and regulations in both cases.

The situation raises a number of potential problems for the congressman, including:

* New York City law requires that tenants use rent-stabilized apartments as their primary residence.

* DC's real Property Homestead Deduction Act also requires that a property receiving the benefit be a primary residence.

* Tax lawyers told The Post that a property owner cannot have two primary residences - or take advantages provided to primary residences at two different addresses simultaneously.

* DC's law also requires that the owner of a property benefiting from the tax break be a personal-income taxpayer in DC. District law exempts members of Congress from paying personal DC income tax, but they must pay property tax.

The DC rules state that "by maintaining a residence in his home state and actively voting there, [a member of Congress] is demonstrating that he continues to be a part of the body politic of his home state . . . The Member is a domiciliary of his home state. Because he is not domiciled in the District, the Member cannot claim the District's homestead deduction."

Said Natasha Altamirano, a spokeswoman for the National Taxpayers Union, "If a member of Congress maintains his or her principal residence in the state they represent, they would not qualify for the homestead exemption."
So, what's the tax bill here? Again we don't know because Rangel's tax records are an abject disaster, but he clearly took advantage of the homestead deduction for 1995 through 2000, in clear violation of the law. At a minimum, we're talking nearly $2,000 in taxes that should have been due but were not paid because he obtained the homestead benefit. DC Code Ann. 47-1806.06 as amended provides the basis of the homestead tax credit.

If Rangel is found not to have been eligible for the homestead benefit, he would be liable for the tax, interest, and penalties dating back to the year in which the tax was due.

Instapundit links. Thanks! He also observes that the situation is beyond a joke at this point. Indeed, the joke is on us as we're going to have to put up with him helping to set tax policy even as reporters continue to uncover the full extent of his tax evasion.

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