Taxation & Estate Planning

Lawmakers Urged to Come Clean on Own Taxes

By Darrin Mish

Senator Tom Coburn (R-Okla) has urged his fellow lawmakers to come clean on their own tax statuses to the federal, state and local governments. The Washington Post recently reported that the Senators and Representatives of the House collectively owed a total of $9.3 million in taxes to the federal government last year. This represents a significant 37% leap from two years ago.

The IRS themselves have not revealed the identities of the culprits but Senator Coburn says the onus should be on the lawmakers to disclose their tax liabilities rather than be found out. He says it?s a matter of leadership by example. As such, Senator Coburn has proposed legislature that requires lawmakers to declare how much they owe in taxes in addition to their annual financial declarations, plus face an ethics enquiry.

But not everyone shares Senator Coburn?s sentiments over this issue. Norman Ornstein, resident scholar at the American Enterprise Institute, feels that there can be many legitimate reasons why a lawmaker, like any other taxpayer, may be behind on his or her taxes. In particular, Ornstein feels that the requirement of an ethics enquiry is too much.

Politicians in general have had mixed fortunes in their political careers as a result of their unpaid taxes. Republican Senate candidate Christine O?Donnell was slapped with an $11,000 tax lien which popular belief held to be the reason she could not win the general election in Delaware. When she paid off her debt and the IRS cleared the lien in June, she won in her Republican primary elections.

On the other hand, Rep Joe Donnelly (D-Ind), in 2006 had a $4,148 tax lien filed against him and this proved a troublesome issue for him even though he ultimately paid off his tax dues.

The IRS typically issues a tax lien (a claim on a property owned by the debtor made to secure payment) against debts that exceed $10,000. The Washington Post checked through the names of the lawmakers against a tax lien database and discovered several of them owed taxes, some as far back as several years ago. Most were state or local unpaid taxes.

Rep Keith Ellison (D-Minn) was the only lawmaker with a tax lien against himself personally. It amounted to $18,301 and was from 2002. In addition, Ellison also had state tax liens albeit before his election in 2006. These were promptly paid off shortly after their filing.

Senator Coburn?s proposed legislation also required that federal employees who have not at least made payment plans to get the sack. This legislation has 9 co-sponsors from the Republicans in the House.

Lawmakers Urged to Come Clean on Own Taxes is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on September 26, 2010 (boomark / email).