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By Mike Soraghan
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Posted: 03/05/07 08:18 PM [ET] |
The House ethics panel’s new travel regulations fail to tell members and staff they might have to pay taxes when they take family members on trips paid for by outside groups.
But that is what will happen if the IRS sides with Public Citizen, the watchdog group, in a complaint filed in October saying lawmakers and families should live by the same tax rules as everyone else.
“This is a complaint the IRS isn’t going to be able to sidestep,” said Craig Holman, the Public Citizen lobbyist who lodged the complaint. “The IRS isn’t going to let me not pay taxes on income like that.”
For years, family members have joined lawmakers on junkets without paying taxes on the value of the travel, meals and lodging. Most people outside of Congress would have to report such a trip as income.
Public Citizen sought to end that discrepancy last year, filing a complaint noting that there is no written exemption to the tax law for members of Congress.
Despite this, the “regulations, forms, and instructions” issued last month by the ethics committee make no changes in response to the complaint and do not warn lawmakers and staff about the potential tax consequences.
“Even if the ethics committee doesn’t have an answer to the question, they are obligated to inform members about this,” said Holman.
On a $1,000 trip, a family member could wind up owing around $250, plus state tax, said Bill Brack, a Washington tax lawyer and former chief of staff to then-Sen. Hank Brown (R-Colo.).
Staffers for the House ethics and Ways and Means committees did not respond to repeated requests for comment, though Ways and Means Chairman Charles Rangel (D-N.Y.) told The Hill he’d never looked at the matter.
Public Citizen’s complaint cited an opinion from the Ways and Means Committee issued last year to The Detroit News, which first raised the question of taxing spousal travel.
“Congressional spouses have an official and public role quite different from the spouses of normal business executives,” the committee wrote. “The travel is permitted under the ethics rules on the grounds that it is related to the official duties of the office.”
Public Citizen says the committee was trying to assign congressional spouses the same role as
the first lady, a charge the committee disputes. And the group notes that this still would not cover members who take children, siblings or other relatives.
Interviews with lawmakers by the News and several other newspapers found no lawmakers who said they made it a policy to pay taxes on trips taken by spouses. Despite the indifference on the part of committee staffs, Holman said the issue isn’t going away.
Congressional staffers were caught off-guard, Holman said, by the idea that trips could be taxed. “They had no clue,” Holman said. “No one had even asked about this before.”
The IRS declined to comment on the issue.
Spouses and family members accompanied lawmakers on about 9 percent of sponsored trips, according to a study of congressional travel by the Center for Public Integrity. The center’s research found that in the year prior to July 2006 corporations and trade and nonprofit groups spent more than $5.4 million to send lawmakers and congressional staffers on roughly 2,700 trips. That was down from 4,700 trips costing $10.3 million the year before.
Since the beginning of the year, members of Congress have accepted more than $45,000 in free travel from outside groups.
At least two members of Congress have brought family members on trips this year. Rep. Tammy Baldwin (D-Wis.) brought her partner Lauren Azar on a three-day trip to Florida paid for by the Commonwealth Fund and the Alliance for Health Reform for a health policy conference. The Consumer Electronics Association paid for Rep. Cliff Stearns (R-Fla.) and his wife, Joan, to attend the Consumer Electronics Show in Las Vegas in January. |
