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Rangel admits 'irresponsible' IRS debt
He says he will pay taxes on beach villa but will not resign
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Published: September 11, 2008
WASHINGTON
The head of the House tax-writing committee acknowledged yesterday that he owes about $5,000 to the Internal Revenue Service for failing to report income on his returns.
But Democratic Rep. Charles Rangel of New York, who is chairman of the Ways and Means Committee, said at a news conference that this should not mean he must relinquish his high position in Congress.
As lead tax man in the House, Rangel has a powerful say over changes to the nation's tax code. And by his own admission, he has no excuse for not reporting years of rental income on a beach vacation property he owns in the Dominican Republic.
"I sincerely regret and take personal responsibility for these errors," Rangel said yesterday in asking the House ethics committee to look into the matter. At another point, he called the omission "irresponsible" on his part and said that it would be corrected in amended filings to both the IRS and the Congress.
"I really don't believe that making mistakes means that you have to give up your career," Rangel told reporters.
Rangel's total back-tax bill will probably approach $10,000 when factoring in state and local levies as well, his attorney said.
Rangel said that over the course of 20 years, he did not know the details of his mortgage on the beach property, how much rent he received from it, or that the rent should have been reported.
After nearly 38 years in Congress, Rangel said, this was the first time he had found himself in such a position.
"As chairman of the Ways and Means Committee, I am held to a higher standard of propriety," Rangel said. Asked if he had lived up to that standard, he replied: "Of course not."
He bristled, though, when asked if his problems could hurt his party in the November elections.
"How the hell would I know how people look at this?" he said.
Republicans are already using Rangel's omission to show that Democrats cannot claim higher moral ground on issues of ethics and corruption.
The spokesman for the House Republican campaign committee, Ken Spain, said that Rangel should "go on a permanent vacation and trade his powerful committee chair in for his favorite lounge chair on the beach."
The internal ethics panel is examining Rangel's unusual deal for the beach villa, as well as four rent-stabilized apartments he uses in his Harlem district, and letters he wrote asking for support for an education center named after him.
Rangel bought the beach house in 1988 for $82,750, with a down payment of $28,900 and a mortgage of $53,850. Over the next 15 years, he did not make any payments directly for the mortgage, but the managers of the resort property used rental income from the property to pay down the mortgage. During all but two years of the mortgage, Rangel paid no interest on it.
His attorneys estimate that he failed to report $75,000 in rental income over 20 years, but that posed a tax problem only when he sold a residence in New York four years ago and his tax liabilities changed.
Yesterday, a watchdog group called Citizens for Responsibility and Ethics in Washington added Rangel to its list of "most corrupt" legislators.
Rangel called that "sad and unfair."
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