Paul L. Caron

Thursday, February 19, 2009

The Next Obama Tax Kerfuffle: Rahm Emanuel's Rent-Free Use of Capitol Hill Townhouse

Pressure is building on Barack Obama's Chief of Staff Rahm Emanuel surrounding his failure to pay taxes (and disclose on congressional ethics forms) on his rent-free use of a Capitol Hill townhouse.  From the New York Post:

Emanuel is a multimillionaire, but lived for the last five years for free in the tony Capitol Hill townhouse owned by [Rep. Rosa De Lauro (D-Conn.)] and her husband, Democratic pollster Stan Greenberg. During that time, he also served as chairman of the Democratic Congressional Campaign Committee -- which gave Greenberg huge polling contracts. It paid Greenberg's firm $239,996 in 2006 and $317,775 in 2008. (Emanuel's own campaign committee has also paid Greenberg more than $50,000 since 2004.) ...

Emanuel never declared the substantial gift of free rent on any of his financial-disclosure forms. He and De Lauro claim that it was just allowable "hospitality" between colleagues. Hospitality -- for five years?

Some experts suggest that it was also taxable income: Over five years, the free rent could easily add up to more than $100,000.

Like Tom Daschle, Timothy Geithner, and Nancy Killefer, the tax issue here seems straighforward and it will be interesting to see what Mr. Emanuel's justification for not paying the taxes due on this very sizeable benefit.

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How do I get on Obama's staff? I could use a little special treatment with the IRS.

Posted by: Deborah | Feb 20, 2009 6:29:03 AM

I guess if you are a tax prof, everything looks taxable until proven non-taxable. This one looks like a legitimate gift to me. Still, politicians need to learn to recuse themselves from decisions to spend government money on their friends.

Posted by: AMTbuff | Feb 19, 2009 10:43:20 AM

Strange to me that these are all conservative outlets and that none names a source.

Posted by: s | Feb 19, 2009 8:27:13 AM

It seems to me it's a gift, and absent some evidence otherwise (I doubt simply being chairman of a committee that paid Delauro's husband would be sufficient) I can't see a court, Congress, or the American public thinking that this is income.

Members of Congress and their staffs shack up with each other all the time because they're not in DC all that often.

Posted by: Kris | Feb 19, 2009 6:26:40 AM

Detached and disinterested generosity?

Posted by: Jason Kilborn | Feb 19, 2009 5:35:53 AM