N.Y. Congressman Rangel Incorrectly Got D.C. Tax Break
Tuesday, November 25, 2008
D.C. officials say that Rep. Charles B. Rangel (D-N.Y.), who recently has been buffeted by questions about his personal taxes and real estate dealings, was incorrectly given a tax break on a house he owned in the District.
Rangel received the "homestead exemption," a property tax break for people who live in a permanent, primary home in the city, that reduced the taxes he paid on a house on Colorado Avenue NW in the Crestwood neighborhood. Rangel and his wife, Alma, bought the four-bedroom house when he first entered Congress in 1971 and sold it in 2000 for $500,000.
City officials said Rangel, who chairs the House Ways and Means Committee, got the tax break from at least 1995 until 2000, amounting to $288 per year, said Natalie Wilson, a spokeswoman for the Office of Tax and Revenue. Officials yesterday continued researching whether the break covered a longer period.
The exemption is designed as a break for people who buy a home in the District and use it as a primary residence. But Rangel always has maintained his primary residence in New York, making him ineligible.
"We are reviewing the matter," said Rangel's spokesman, Emile Milne.
If Rangel incorrectly received a D.C. tax break, he could owe back taxes or penalties.
Receiving the District's homestead exemption could also create a problem for Rangel in New York, where he and his wife have occupied several rent-stabilized apartments in Harlem. To qualify for the low-cost rentals, tenants in New York must claim them as a primary residence.
The House ethics committee began an investigation of Rangel at the congressman's request after a series of news reports raised questions about his personal financial affairs.
He came under fire over the summer for occupying the rent-stabilized apartments in a city where affordable housing is scarce. Some contend that Rangel's below-market rent amounts to an improper gift from the landlord; the congressman disagrees.
Rangel also acknowledged that he had not disclosed, or paid taxes on, at least $75,000 in rental income from a beachfront villa in the Dominican Republic that he has owned since 1988 -- a home financed, in part, with a no-interest loan from the developer. He paid back taxes of $10,800 to the Internal Revenue Service and New York state.
He pledged in September to hire a forensic accountant to untangle his records but delayed the hiring until this month. Milne said he did not know why the hiring was delayed.
The ethics probe will also examine whether Rangel violated House rules by writing letters on congressional stationery to try to raise $30 million for the new Charles B. Rangel Center for Public Service at the City College of New York. The ethics panel also is looking into Rangel's long-term storage of a broken-down 1972 Mercedes-Benz in a House garage, an apparent rules violation.
Rangel, 78, has said that he did nothing "morally wrong" and that, at worst, he could be accused of sloppy record-keeping.
Rangel is not the first member of Congress to incorrectly receive the D.C. homestead exemption. In 2005, the District determined that a computer program had automatically awarded the exemption to 22 senators, several of whom said they were unaware they were receiving it.
Staff researcher Julie Tate contributed to this report.