G. Gordon Liddy was convicted for his role in the Watergate break-in, but he had better luck this week against the tax collectors.
The U.S. Tax Court ruled Monday that Liddy will have to pay taxes on only $45,630 of the $386,000 he received to fund the illegal activities he directed in 1972 as general counsel of the Committee to Re-Elect the President.
Liddy disbursed the rest, according to a budget that he supplied the court, for such purposes as planting spies in Democratic campaigns, recruiting operatives, shredding cash and paying salaries to convicted burglars James McCord and E. Howard Hunt, among others.
The Internal Revenue Service had contended that Liddy owed taxes on $176,800 in undistributed receipts. Liddy said that he had disbursed all of the money, but he could not account for $45,630 to the court's satisfaction.
The court also ruled against the IRS in finding that Liddy's wife, Frances Purcell Liddy, was not individually liable for taxes on any of the money. And the court said that Liddy had not acted with intent to defraud the government, thus relieving him of an additional fine of $51,766 that the IRS had imposed.
Liddy's New York publicist, Kevin Flaherty, called the decision "good news," but could not say whether Liddy would appeal.