Yesterday, I blogged the Gawker story, Obama's Chief Vetter Has His Own Tax Problem, reporting that White House general counsel Gregory Craig, brought in to run the Obama Administration's vetting process after the controversy over the tax problems of nominees Tom Daschle, Tim Geithner, Nancy Killefer, and Hilda Solis, may have a tax problem of his own:
Derry Noyes, Craig's wife, runs Noyes Graphics, a design business, out of the couple's home in northwest Washington. ... Operating a business out of one's home in D.C. requires a home occupation permit and registration with the city's division of corporations. Additionally, the government has instituted a new requirement for business license permits. A spokesman at the Washington D.C. Department of Consumer and Regulatory Affairs told Gawker that no one has ever sought any kind of permit or registration for a business under the name of Noyes Graphics or at the Craigs' home address. By not registering Craig may have avoided local business taxes.
Tax Prof Stephen Cohen (Georgetown) says that the Gawker story misstates the Washington, D.C. law and complains that I did not verify Gawker's allegations before blogging them:
First some disclosure. Gregory Craig is an old friend of mine. We worked closely together in the late 1960s and early 1970s opposing the Vietnam War policy of the Untied States and have been friends ever since.
Second my complaint. TaxProf's reference to the blog about Greg -- repeating [Gawker's] inflammatory headline -- illustrates the abuse which the internet commits when it uncritically spreads false allegations made by others. The headline refers to possible tax avoidance but there is not one line in the body of the article indicating a tax problem. In fact, Derry Noyes Graphics was neither subject to the Washington, D.C. business franchise tax, nor required to have registered as a business in Washington, D.C.
The D-30 Business Franchise Tax Form for Washington, D.C. has an exemption for a business for which at least 80% of revenues come from "personal services actually rendered by owners or members of the business." GIven the graphic design nature of Derry Noyes' business, this requirement for exemption is undoubtedly met. ...
[The] new DC licensing requirement of a General Business License ... went into effect on Deceber 31, 2008. Although Derry Noyes' Graphics may be subject to this requirement, the business is located in zip code 20008 and therefore has until April 30, 2009 to register under this new requirement. ...
[T]he DC requirement of a Basic Business Licence ... does not apply to a graphics design business because such a business is not among the listed categories required to register. You will note that the categories are of businesses for which there is regulation for reasons of public health or safety. Graphic design is not among the listed categories, nor does it affect public health or safety in the same way as a restaurant, funeral home, pharmacy, or general contractor.
Academics have a particular responsibility to verify allegations that may be false before spreading them. I am disappointed that TaxProf did not do minimal checking in this instance. It took me seconds to verify that Derry Noyes Graphics has been exempt from D.C. business registration and franchise tax requirements. TaxProf has wrongly besmirched, Gregory Craig, a dedicated and honest public servant.
Update: More from Stephen Cohen:
When I wrote to you previously, I had not yet talked to Derry Noyes. I just have
She tells me that, notwithstanding possible exemptions, her business is registered in Washington, D.C. and she does pay the business franchise tax.
I think this information reinforces the idea that it's risky and imprudent to retransmit flimsy gotcha allegations from questionable sources.