Tax Profs: Palin Owes Thousands in Back Taxes

Over the weekend I noted the academic discussion over whether Sarah Palin had underpaid her federal taxes. In the time since, it appears that tax law professors are coming to harder opinions on the issue, and some bastions of the establishment media are beginning to take note.

Lewis and Clark law professor Jack Bogdanski, writing under the headline "There's no debate: Palins owe thousands in back taxes," concludes as follows:

There is no serious debate (at least, none that has been brought to our attention) about the fact that at least the amounts paid for the children's travel -- $24,728.83 in 2007, according to the Washington Post -- are taxable. The campaign's tax lawyer has got at least that much of the law, and perhaps more, wrong. ...  The Palins, who had their tax returns done by HR Block, simply got it wrong. And the fact that the state payroll office got it wrong, too, doesn't erase the Palins' unpaid tax liability.

Per Paul Caron of TaxProf Blog, professor Bryan Camp of Texas Tech University agrees with Bogdanski:

The Palins did not report as income some $43,000 that the State of Alaska paid the Governor as an "allowance" for her husband and children's travel. Can they do that? No, most likely not.

The relevant regulation states that when a taxpayer ascertains that an item (like, for instance, travel allotments for children) should have been included in gross income for the previous taxable year, he or she "should" file an amended return and pay any additional tax. Treas. Reg. § 1.451-1(a). Now "should" means "should," not "must" or "shall," so Palin would be under no legal obligation to make this disclosure to the IRS. But what flies in the world of law doesn't always fly in the world of electoral politics, and trying to continue to exempt these travel benefits from taxable income even in the face of the agreement of scholars that such benefits should be included in taxable income doesn't have tremendously great optics.

And this story is beginning to be picked up by the establishment media. On Saturday, National Public Radio touched on the story, but not in a great deal of depth. Today, The New York Times' Caucus blog covered the controversy, linking to the posts by Bogdanski and Camp, though it remains to see if the story ends up in the dead tree version of the publication. The same goes for The Wall Street Journal, which covered the story online but not yet (to my knowledge) on paper. It's not clear to me that this story will have legs, particularly given how much is going on in the world, and in politics specifically, at present. Yet at the same time, if the story does even have a day in it, which it might, that's one more distraction and wasted opportunity for the McCain campaign, which is flailing to change the course of this election.

Tags: Sarah Palin, Taxes (all tags)

Comments

7 Comments

Re: Tax Profs: Palin Owes Thousands in Back Taxes

There was an anti-Palin rally again in Alaska just a weekend or two ago.  My favorite sign directed at Governor Palin was, "I can see the end of your political career from my house."

by Scotch 2008-10-06 04:48PM | 0 recs
Re: Tax Profs: Palin Owes Thousands in Back Taxes

"Payin' taxes is NOT patriotic, nor is is necessary"  ~Gov Pally

by neko608 2008-10-06 05:34PM | 0 recs
Help force the media to cover this story

Here's a "chain email" on McCain and Palin's taxes:

John McCain and Sarah Palin have a big secret and it's one that took down mobsters like Al Capone: they've been cheating on their taxes. They're hoping nobody in the media or the IRS notices that they've cheated their way out of thousands of dollars of tax revenue.

Let's look at the facts.

John McCain is a compulsive gambler. The Bible tells us that an addiction to gambling is a SIN. He plays "craps" regularly, sometimes for more than 12 hours at a time. He's known as a high-stakes gambler in Sin City itself. And yet he has never reported he gambling income or losses on his tax forms, as required BY LAW. That's not the only bit of tax fraud he's committed. The McCains also failed to pay the property taxes for FOUR YEARS on one of his 8 houses.

Can you imagine what would have happened if you didn't pay your property taxes for four years?

Sarah Palin has broken the law just like John McCain has. As reported in every major media outlet, Sarah Palin paid herself with taxpayer money to live in HER OWN HOME. She paid herself a "per diem" fee to live in her own home, even though that is meant for travel expenses only. This is on top of her normal salary. And not only did she take the taxpayers' money, she also didn't report this per diem money in her taxes, and paid far less percentage-wise than you or I pay in taxes.

McCain and Palin want dodge paying taxes and want to give the rich huge tax breaks and let companies hide in offshore tax shelters while YOU have to pay your taxes.  Does that sound fair to you?  Do we really want them leading our country?

Here's what to do: send this text to the following "fact checkers" and tell them you received it as an email and you want to know if it's true:

Editor@FactCheck.org

Contact Snopes.com fact checking

by barath 2008-10-06 05:36PM | 0 recs
Wow, you guys really don't understand the base?

This will HELP her standing.

The base HATES the IRS, they will think she is being persectuted for her views.

Now, try and explain to them that this is a REPUBLICAN version of the IRS, and you
REALLY have to go some to get nailed as watered down as they have made enforcement...

The cognitive dissonance in their brains will lock out any attempts at logic.

If that evil MSM picks this up, they will say they are going after Palin for trashing them.

She is a hero already, this will double her stature with these psychos.

by WashStateBlue 2008-10-06 05:56PM | 0 recs
Re: Wow, you guys really don't understand

They already have the base.  That might be all they have.  

by Scotch 2008-10-06 08:24PM | 0 recs
Re: Tax Profs: Palin Owes Thousands in Back Taxes

So Sara Palin didn't report $43,000 of income on her taxes? The only reason Palin won the race for Governor of Alaska is because she was able to "out-crook" all the other crooks.

by zenful6219 2008-10-06 06:38PM | 0 recs
Stinkin' eltists

"Tax law professors are coming to harder opinions on the issue"

Joe Sixpack doesn't need any high-falutin' perfessor tellin' him what is and isn't "legal".  Heck, in Wasilla we drove out all of the perfessors and witches and then we cut taxes and gave everyone a pony, dontcha know.

/Palin

by the mystical vortexes of sedona 2008-10-06 10:49PM | 0 recs

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