Sarah Palin's Tax Matters
By James V. Grimaldi
Washington Post Staff Writer
In September, after The Washington Post reported that the GOP vice presidential candidate, Alaska Gov. Sarah Palin, had charged the state per diem expenses when she was staying in her own home, her office issued statements claiming that the practice was fine. "The governor is entitled to a per diem, and she claims it," gubernatorial spokeswoman Sharon Leighow said at the time.
Palin billed the state for 312 nights spent in her Wasilla home during her first 19 months in office, according to The Post's review of expense reports between late 2006 and August 2008. Though the story caused a bit of a sensation at the time, The Post could find no record that Palin had ever been asked about the per diem, which officials justified by saying that Juneau was her "duty station" and any time spent in Wasilla meant she was allowed the state alottment of $60 a day for meals and sundries.
After the election, Palin appeared on the Greta Van Susteren show on Fox News and defended the practice: "We've always followed the law and fully disclosed all that."
What Palin did not say was that she had enough doubt about charging per diem to stay in her own home that she asked the state to conduct a review to determine if the practice was correct and allowable.
This week, a state official said the review found that the practice amounted to adding income to her $125,000 salary and that she would have to treat the payments as taxable. (If the practice had been correct, the payments would not be taxable as an allowable business expense.)
"At the Governor's request, we reviewed the situation to determine whether we were in full compliance with the pertinent Internal Revenue Service regulations," state administration commissioner Annette Kreitzer wrote in an e-mail to the Anchorage Daily News this week. "As a result of this review, we determined that per diem needs to be treated as income, requiring a revision of W-2 forms for any affected employees."
Obtaining further information on the governor's taxes was difficult.
The Post called the governor's spokeswoman, Sharon Leighow, and was told by an aide she would only respond to e-mails. However, in e-mails, Leighow would not say how much Palin owes in back taxes, or whether she intends to continue to seek the per diem allowance. She wouldn't say if Palin planned to file amended returns for 2007.
"I am not in a position to comment on the Governor's personal returns," Leighow said. She referred further questions to Kreitzer. But Kreitzer, who did not return a phone call, said in an e-mail, "The Governor will address her tax issue."
When The Post followed up, asking if Palin thought it was important to pay all her taxes, Leighow responded:
"Nothing I have said can be construed to say that the governor will not pay her taxes, or has not paid her taxes. She has paid what she understood she owed, and she is the one who asked for a review of the per diem situation when the subject surfaced last fall. She has done nothing wrong and will comply, of course, with all pertinent IRS regulations and rulings. It is amazing that you would even pose this question, and it seems indicative of a hostile bent to your story."
The Post asked Kreitzer for a copy of the report outlining the per diem issue. Kreitzer said, "No, it is legal advice and subject to privilege."
The Post also asked Leighow for the report. So far, no reply. In the meantime, The Post has filed a request under the Alaska public records act to obtain the review.
By The Editors |
February 19, 2009; 4:34 PM ET
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