I'll need to remember this one if I ever have issues with my own state taxes:
Bronx Rep. Eliot Engel may call himself a life-long Bronx resident, but he has also called Maryland his primary residence for years to get a local tax break that state officials have just squashed.
Engel, who rents an apartment back in his district, also owns a $1 million house with his wife in the well-off Washington suburb of Potomac, Md. - a property that has been afforded $7,000 in tax breaks since he bought it in 1993, The Associated Press reported.
The NYDN article goes on to give Engel's claim that he wasn't trying to defraud anyone - which is interesting, given this New York Times article on the subject:
Maryland tax officials first revoked his credit in late 2005, about the time that several elected officials representing other states were informed that they would have their credits removed.
Mr. Engel and his wife contested the loss of their Maryland primary-residence status, which was reinstated, then revoked again after Maryland laws were changed recently.
Jeremy Tomasulo, an aide to the congressman, maintains that Mr. Engel’s primary residence has always been in the Bronx.
But his property tax documents say otherwise, a claim that was worth nearly $7,000 in credits to Mr. Engel and his wife over the past four years because people in Maryland are eligible for state and county tax breaks on their primary residence
Now, I want you to imagine what would happen to you if it came out that you had been playing games with your primary residence status for the last four years... games that got you seven grand in rebates that you technically weren't supposed to have. What do you think would happen? You know what would happen: you'd be on the hook for all that money. Immediately. You'd also be on the hook for the accumulated interest on that money (which would be calculated by the state), the penalties for failure to file (which would be calculated by the state), and possibly the legal fees involved (which would be calculated by the state). Your credit rating would shrivel up and die. If you didn't have the money, you'd probably end up in court; you'd certainly get your income garnished; you might even have your assets seized. Seven grand's actually a bit small for jail time, but you never know. And all of that would be in the context of dealing with a government agency, which is a special joy all its own. None of that is going to happen to Rep. Engel, because he's a five term Democratic Congressman. He's not even going to have to give the money back.
It's not the fact that the tax laws are convoluted that infuriates. It's that people like Rep. Engel (D, NY-17) are well aware of the fact that they are immune to any ill consequences that might result from not following them. Actually, even that's not true: it's the fact that they're apparently right...
Crossposted to Moe Lane.