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Saturday, February 12, 2011

Do Congressmen Who Sleep in Their Offices Receive a Taxable Fringe Benefit?

Citizens for Responsibility and Ethics in Washington (CREW) has sent this letter asking the Office of Congressional Ethics (OCE) to investigate whether 33 members of Congress (7 Democrats and 26 Republicans. all men) who sleep in their offices are violating the tax law by failing to report the free lodging as a taxable fringe benefit. From CREW's press release:

[U]nder the Internal Revenue Code, members who sleep in their offices are receiving a taxable benefit. The IRS treats lodging as a taxable fringe benefit unless it is offered on the employer's business premises, is for the employer's convenience, and is required as a condition of employment. As living in a House office clearly is not a condition of serving in Congress, members must pay taxes for imputed income based on the fair market value of their lodging.

Notably, members of Congress and congressional staff already have imputed taxable income based on the fair market value of their reserved parking spaces. If members must pay taxes to lodge their cars, surely they must pay taxes for their own lodging. 

"Americans expect members of Congress to follow the tax laws just like everyone else.  If legislators are going to treat their offices as dorm rooms, at the very least they should pay the appropriate taxes."

(Hat Tip: Mary O'Keeffe.)

UpdateThe Tax Consequences of Congressional Sleepovers (Feb. 14, 2010)

http://taxprof.typepad.com/taxprof_blog/2011/02/must-members-.html

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Comments

I'm happy if they sleep there alone.

Posted by: mike livingston | Feb 12, 2011 6:32:50 AM

How petty. Of all the major issues in Washington and important tax matters, this ranks pretty low. CREW, whatever that is, must be desperate for media attention. I looked at their list of "most corrupt members of Congress," and it seems noteworthy for the politicians that it leaves off rather than for the ones that it lists. I wonder why.

Posted by: Woody | Feb 12, 2011 8:30:12 AM

Really? Come on, who cares. lol

Posted by: John | Feb 12, 2011 9:19:59 AM

Thanks for the manufactured outrage of the day, CREW. Now move on to something relevant, please.

Posted by: Cody L | Feb 12, 2011 5:52:25 PM

Actually, CREW makes a good point- and it is an ethical issue. Other members of Congress incur substantial expense to buy or rent in the area while still maintaining homes in their districts. The question is: what is the fair market value for the rental of a couch in a room with no other amenities to speak of- and a bathroom down the hall? Even a room at the "Y" offers more. So maybe it's equivalent to a campsite with heat and air conditioning (except when the HVAC goes off at night). The GAO may be able to conclude that the cost is deminimus. Like the gym.

Posted by: THEHAWK | Feb 13, 2011 11:49:49 AM

My tax dollars pay the Congress critters to spend my tax dollars. I want them all sleeping at the Capitol!

Posted by: MochaLite | Feb 13, 2011 5:27:44 PM

Here they are away from home overnight requiring sleep, thus, employer provided loding is a non-taxable event.

Posted by: Roy Cline | Feb 14, 2011 2:00:18 PM