TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, March 21, 2009

Bi-coastal Tax Chutzpah: CA & NY Congressmen Say They Live in Maryland to Claim Property Tax Break on Million Dollar Vacation Homes

In yet another amazing case of tax chutzpah:  California congressman Pete Stark has improperly claimed a Maryland lakefront home (assessed at $1.7 million) as his primary residence in order to qualify for a special real estate tax break:

A senior member of the House's tax-writing Ways and Means Committee, Stark said he was unaware that he might not be eligible for the tax break. Asked whether it was questionable for him to receive it, he said, "I guess it is."

To qualify, a property must be the owner's principal residence: He or she must live there at least six months of the year, use the address for voter registration and driver's license purposes, and file Maryland income taxes. Stark is registered to vote at his wife's parents' address in San Lorenzo and has a California driver's license.

Earlier this month, Congressmen Eliot Engel, a lifelong resident of the Bronx, was outed for claiming the Maryland real estate tax break on his Maryland home (formerly owned by ABC's Ted Koppel and Wonder Woman Lynda Carter) assessed at $938,000.

Tom Daschle claimed a similar homestead exemption for his $1.9 million Washington, D.C. home while he represented South Dakota as Senate Minority Leader, and this was an issue in his losing 2004 re-election campaign.
       

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» Go to Congress to Represent California and New York, but Get Maryland Tax Breaks. Only in America! from JSMiles
The Tax Law Prof lets us know, with helpful links, that two House members claim Maryland homes as their primary residences so they can qualify for a Maryland Homestead Tax Credit. Unfortunately, one member, Pete Stark, represents California and the... [Read More]

Tracked on Mar 21, 2009 3:28:23 PM

» Politicians property tax problems from Don't Mess With Taxes
When it comes to property taxes, it's not just you, me and a certain Motown star that have issues. Politicians do, too. The new chair of the House Ways and Means Committee, Michigan Democrat Sandy Levin, last week repaid a Maryland property tax credit ... [Read More]

Tracked on Mar 9, 2010 10:20:09 AM

Comments

Stark was a banker before running for Congress. I believe he was famous for putting peace symbols on the bank's checks. He will have a hard time claiming that he was financially unsophisticated.

Posted by: mike livingston | Mar 21, 2009 7:22:18 AM

I like your blog, a lot. But please don't force us to have to play NAME THAT PARTY again. Your so much better than the MSM.

Posted by: countertop | Mar 21, 2009 11:31:53 AM

90% tax rates aren't bad when you never pay them yourself. Democrats: America's Law-Exempt Party

Posted by: HatlessHessian | Mar 21, 2009 11:45:15 AM

Further evidence that Congress IS the problem. NO ONE should come home from Washington DC wealthier than when they arrived.

We need to either demand term limits or lifetime bans on lobbying (domestic and foreign) and participation on corporate boards.

We must winnow out the self serving crooks from citizens who truly want to serve their constituents.

Posted by: dan | Mar 21, 2009 11:51:26 AM

Professor: Your post doesn't mention the party affiliation of these unpatriotic tax cheats. Can you help a girl out here?

Posted by: Johanna Lapp | Mar 21, 2009 12:00:22 PM

The unasked question is how is Congressman Engel, who was a teacher for a few years prior to serving as an elected official for the last 22 years, living in a house assessed at a million dollars. I only wish Democrats we as good at spending my money as they seem to be with their own (and special interest?) money.

Posted by: Bob | Mar 21, 2009 12:03:51 PM

Professor aside from state tax consequences, can those clowns be considered automatically resigned from office as they are no longer residents of their districts? Just how do you represent a district you don't reside in?

Posted by: cubanbob | Mar 21, 2009 12:08:13 PM

I wonder what party those guys are affiliated with.

Posted by: MSD | Mar 21, 2009 12:09:08 PM

Since we're playing "Name that party" here, am I correct in assuming they are both Democrats?

Posted by: jc | Mar 21, 2009 12:23:48 PM

So.....
What party are these two politicians a member of?

Oh - I see - they are Democrats. Then no wonder this isn't in the news.

Posted by: KSM | Mar 21, 2009 12:57:22 PM

This is another excellent argument for term limits.

These guys have been in Congress and out of the real world so long that they don't even know which state they live in

Posted by: Taxpayer | Mar 21, 2009 1:41:15 PM

You can't hold Congressmen to this standard. It is not like they pass judgment on what other people make as a salary. Oh, nevermind......

Posted by: Borealis | Mar 21, 2009 1:45:07 PM

I didn't notice any party affiliations attached to the principals in your story. Coincidence?

Posted by: Stephen Murray | Mar 21, 2009 2:58:53 PM

Glenn is right, they should be expelled from Congress.
What did Pelosi know and when did she know about this?

Posted by: Elroy Jetson | Mar 21, 2009 3:04:31 PM


How the hell do these people afford 2 expensive residences, fancy cars and vacations, private school for their kids, etc., on their Congressional salaries?

Obviously some of them were rich before being elected, but all of them?

Does the IRS ever look at stuff like this?

Posted by: Chester White | Mar 22, 2009 7:24:50 AM

The Maryland statute involved (MD. Tax-Property Art. § 9-105) states that the credit is available with respect to a "dwelling" that is defined as follows:

1. A house that is:

A. used as the principal residence of the homeowner; and

B. actually occupied or expected to be actually occupied by the homeowner for more than 6 months of a 12-month period beginning with the date of finality for the taxable year for which the property tax credit under this section is sought; and

2. the lot or curtilage on which the house is erected.

Thus, there is no requirement in the statute that an individual's residence be "the location designated by the owner for the legal purposes of voting, obtaining a driver's license, and filing income tax returns." That requirement was added in the regulations and is a shorthand version of a qualification for one's domicile rather than one's principal residence. See COMAR § 18.07.03.01(b)(3). However, it is clear that the statute meant "reside" not "domicile" since it allows one to be deemed to have resided in a dwelling when, due to illness or damage to the dwelling, one does not actually physically reside there. See MD. Tax-Property Art. § 9-105(c).

I'm willing to bet that, in all cases, the dwellings were, in fact, the principal residences of the Congressional Representatives involved, but were not their domiciles. Unfortunately, Maryland has a nasty tendency to legislate via regulation, particularly in the tax arena.

If the Maryland General Assembly chose to grant the credit to persons who were domiciled in Maryland, it could easily have so limited the statute. Because it did not so limit the statute and because the credit is available with respect to the principal resident of a dwelling, the credit should be available here (assuming, as I do, that, in fact, the dwellings are the principal residences of the individuals involved).

Posted by: Stuart Levine | Mar 22, 2009 2:46:20 PM

Hmm, I wonder. What political party do all three of these tax cheats belong to? Could it be the Democrat Party?

Why yes, it could.

And would that be a relevant bit of information to include in your post? You know, "Bi-coastal Democrat Tax Chutzpah: CA & NY Congressmen Say They Live in Maryland to Claim Property Tax Break on Million Dollar Vacation Homes".

Esp since Tom Daschle wasn't a "Coastal" Senator, but is a Democrat.

Posted by: Greg Q | Mar 22, 2009 7:49:40 PM

Somebody needs to file a FOIA request to the state of Maryland to see exactly how many of our "representatives" are claiming primary residence in Maryland. Then their "constituents" back home should immediately file to have them expelled as their representatives, since their primary residence is no longer in their districts.

Posted by: Ddad01 | Mar 23, 2009 5:39:44 AM

Why haven't these guys been nominated for a cabinet post?

Posted by: bad | Mar 23, 2009 5:42:54 AM

Check residency issue regarding Wexler for some thing at www.wexlersweb.com They are all guilty of violating the constitution, Article I, section 2. As such, they should all be removed from office. Wexler is also tied into Blagojevich, Harry Sargeant and all of the pump and dump and gambling companies. They write the laws but they refuse to follow them. This is disgusting. I would also venture to say that they are guilty of tax fraud, insurance fraud, dmv fraud, voter fraud and mortgage fraud (if they listed that home as their prinicpal residence on their mortgage app). By living in Md for more than 6 months and having their children go to school there, they are not residents of the state that they are supposed to represent, therefore they are in violation of the constitution and should be removed from office. It is time that republicans grow a set and do something about it now.

Posted by: Edward Lynch | Mar 23, 2009 4:50:08 PM