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Oops: Rangel's $75,000 of Unreported Income
By
Jen Chung
Published Sep 5, 2008
Modified Sep 5, 2008
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By
Jen Chung
Published Sep 5, 2008
Modified Sep 5, 2008
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What a week for Representative Charles Rangel! On Sunday, the House's Ways and Means Committee was on the cover of the NY Post, which said rental income from his Dominican Republic villa was not reported to the IRS in 2006 and 2007. Today, he's back on the front page...but this time, it's the NY Times which says he failed to report $75,000 in income since 1988 from that very villa!
When Rangel's not there, the villa is rented out to guest at the Punta Cana Resort. Rangel's lawyer, Lanny Davis, tells the Times his client will probably file amendments to his tax returns: "Mr. Davis said the congressman did not realize he had to declare the money as income, and was unaware of the semiannual payments from the resort because his wife, Alma, handled the family finances and conferred with their accountant, John Viardi, on tax matters." Oh, and since Punta Cana only sent "intermittent statements," that also confused Rangel, his wife, and/or their accountant.
Rangel bought the property at the urging of his friend, labor lawyer Ted Kheel. Kheel released a statement saying, "The purpose of that investment was not to create cash payments to Mr. Rangel, but rather, to have a place for occasional vacations for himself and his family similar to a time share." (Apparently income was small from the 3-bedroom, 3-bath villa, since money was taken out for resort's maintenance, Dominician taxes, etc. defray the mortgage, first.)
Davis also told the Times that Rangel "will probably have no federal tax liability...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." The Times adds that though "intentionally filing a false report is a felony that carries a possible five-year prison sentence," "in most cases the House ethics committee does not punish members for errors or omissions." And in NY State, criminal prosecutions for filing a false tax return are rare. Well, at least Rangel has his three rent-stabilized apartments to fall back on.
Tagged
charles rangel
dominican republic
Punta Cana
taxes
Ted Kheel
unreported income
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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