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Sarah Palin's Tax Matters

POSTED: 04:34 PM ET, 02/19/2009 by The Editors

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
Previous: Editorials: Burris 'Must Go' | Next: IRS Wants More UBS Names, Burris's 'Courtesy Call', Stanford Probe Widens

Comments

Please email us to report offensive comments.




Wonder why WaPo didn't investigate Obama/Rezko or the Exelon Debacle? Why was vetting a VP candidate, Palin more important
than vetting a POTUS candidate. Obama? Not one atricle in the WaPo on Rezko/Obama or Exelon. Why? Go figure?

Posted by: bnw173 | February 19, 2009 5:34 PM

Per diem is paid when an employee is about 40 miles away from his/her duty station and is staying at a hotel. One presents the paid hotel bill and get reimbursed by the government. This woman is a typical republican making her own regulations to benefit no one but Palin. She better cough up taxes and penalties to our dear Uncle.

Posted by: truth1 | February 19, 2009 5:43 PM

"(If the practice had been correct, the payments would not be taxable as an allowable business expense."

I don't see how this is true. There are two separate issues:

1) Were Palin's claims for per diem allowed under Alaska law. Answer: Apparently so.

2) Is receiving a "per diem" for the "expense" of living at home taxable? Answer: Yes, according to the IRS, because it's not a non-taxable reimbursement for a business expense.

The two rules are separate--If the IRS rule were different, every employer would call its salary "per diem expenses" and no employee would have to pay any taxes. So it's the substance of the payment, not its name, that governs whether it's taxable.

Posted by: ah___ | February 19, 2009 5:55 PM

bnw173 - Ever try google?

Here is a link to a WaPo fact check post on Exelon - voices.washingtonpost.com/fact-checker/2008/02/obamas_backroom_deal.html

And there are several articles on the Rezko matter on WaPo - www.washingtonpost.com/ac2/related/topic/Tony+Rezko?tid=informline

Check it out!

Posted by: CaptainScience | February 19, 2009 6:16 PM

Stall, smoke & mirrors, stall, stall....her usual M.O. Don't ya know Sarah-rah and her flunkies need time to make sure they cover up everything that might get uncovered? Just as predicted when introduced to America, the skeletons are coming out left and right! (no pun intended) What happened to "I expect to be criticized and held accountable"? christian values/family values/open and transparent/reformer....... pfffft!

Way to go WaPo!

Posted by: leather2go | February 19, 2009 6:16 PM

"There I was, taking my shots" Sarah proudly claimed after being questioned why she was being paid with State money to live and eat in her own home.

Gotta love good Christians. They are the best in the world at rationalizing anything they want to do.

I'm still waiting for her to confess it was God's Plan for her to lose the election. She seems to conveniently skipped over that little item.

Rationalizations--better than sex!!

Posted by: patrick10 | February 19, 2009 6:37 PM

There's legal, and then there's just head-slapping stupidity.

Her salary is $125,000. Todd - through his work in 2007 - apparently made close to $93,000.

I realize they have that brood, but $218,000 wasn't enough income? They had to charge the state another $17,000 for living at home?

It may be legally correct, but c'mon. It just doesn't look good. If she wants to have a career in national politics, she needs to grasp that sometimes, what's legal isn't what's right.

Posted by: Chasmosaur1 | February 19, 2009 7:03 PM

Who cares? As dumb as Palin is, I'd expect her to be in some kind of tax or other financial trouble.

As a politician, she's history!

Posted by: surfer-joe | February 19, 2009 7:19 PM

When's the big wedding?
I hope granny has a real nice sexy dress.

Posted by: charlesalmon | February 19, 2009 8:04 PM

Do you really think Palin isn't fully aware of the microscope the media has her under? I sincerely doubt she would mess with the taxes. I challenge the Post to fully investigate the tax doings of Rahm Emanuel. Seeing as the Obama administration has turned a blind eye.

Posted by: kimm3 | February 19, 2009 9:00 PM

Surfer Joe,

Grow up please. Sarah Palin will be in Politics for a long time. She is not stupid as the MSM makes her out to be.

Please look in the mirror liberal!

Posted by: bvb720 | February 19, 2009 9:42 PM

Coulter and Palin, getting turned down in round one of PBs "Hottest GEE Oh PEE Babes". Hef, you still gotta eye for talent!

Posted by: 3rdGenRFan | February 19, 2009 9:58 PM

good photo!...a few months back the media, reporters and political pundits loved Sarah as the gift that keeps giving, and she just keeps giving.

Posted by: keithkcummings | February 20, 2009 12:18 AM

Sarah Palin should never be the Republcan nominee for President.

If the Party choses her as their candidate the Party will suffer a loss so severe that it may never recover.


This "story" about her income taxes however is overblown.

Posted by: WESHS49 | February 20, 2009 10:46 AM

Palin had her 15 minutes of fame. Yet everyone is supplying her with more exposure (at least more exposure than she received when she won beauty contest over a bunch of Huskies) than McCain...

Posted by: willworknights | February 20, 2009 1:56 PM

Hey Leather head2go, It was God's Plan

Posted by: trossman | February 20, 2009 4:19 PM

Good thing she wasn't nominated for a cabinet position.

Posted by: Spectator | February 20, 2009 7:38 PM

Where are Chris Dodd's mortgage papers?

Posted by: ConservativeProfessor | February 21, 2009 8:38 AM

Did Sara "look into the tax matter" only because the matter was going to be probed
for legitimacy? Sort of like "let's put the cookies back before someone knows they are gone?"

Posted by: eldonbloedorn | February 21, 2009 4:22 PM

So Gov Palin asks for an investigation on herself and you criticize- as if she was doing someting nefarious and secretive...as she wants to do te right thing she asked for the opinion. To bad Daschle,Geitner,Rangel ,Obama and the like didnt do the same.That would be transparency in govt. Cudos to Sarah for setting such a high bar for politicans- investigating ones activities before you are caught- to be sure you are doing the right thing- and not just hiding the fact that you are doing the wrong thing- or explaining away your"mistakes" later

Posted by: brucenahin | February 21, 2009 4:26 PM

well at least it now makes her qualified to join the obama administration.

Posted by: carthage87 | February 22, 2009 12:12 PM

ALASKA is fed up with this lying, cheating, divisive and unethical governor. She speaks to us daily on the Alaskan blogs using her minions from her TeamSarah Hate Machine. No one but Governor Palin cheated the state out of Per Diem and Children's travel but the Hate Machine(Sarah) blames everyone else as if they held that pen and doctored and submitted the reimbursements for her. The Hate Machine does identify the culprits:
The State Of Alaska & their legislature
The Governor's Department of Administration
Chelsea Clinton and her parents, rougue republicans and liberals, two past governors, of course the Obamas, but the real kicker was when they blamed it on Obama's grandmother. TeamSarah blasted into Alaskan politics by using the same divisive tactics as she did on the national stage running for VP. Then she worked her divisive magic throughout the State of Alaska in order to cover up for her incompetence. Alaskans are finally catching on. Your support is appreciated. We need your assistance in blogging this cloud(clown?) hanging over our state right off the map. thanks

Posted by: xango_xango | February 26, 2009 2:49 PM

kim3: she finally woke up and realized she had put herself under a microscope - these inequities were brought to her attention months ago. Alaskans are holding her feet to the fire and that is the only reason she came forward.

Governor Palin's Ponzi scheme in Alaskan politics is just beginning to be uncovered, stay tuned.

Posted by: xango_xango | February 26, 2009 3:03 PM

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