At one point I served as an attorney for Rep. Charles Rangel (D-N.Y.). So I am only going to stick to published facts in this column.Recently, a very good friend of mine who is the host of a cable TV show expressed no interest in my reviewing these undisputed, published facts because, he said, Rangel is a “tax cheat,” and what more is there to say?
So let’s start with that as an example of someone — a good person who believes in due process — who has been misinformed and is not aware of the facts, and thus reached an erroneous conclusion about Rangel.
Fact: Involving the matter before the House ethics committee, there is no evidence whatsoever that Rangel intentionally did not pay his income taxes. As we know from the initial reports in The New York Times, Rangel was unaware, for a period of over 20 years, that he owed any income taxes regarding a condominium in the Dominican Republic. He first learned that was the case in the summer of 2008. The tax liability arose from a distribution of proceeds to all the condo owners after expenses were paid — but the distributions were “non-cash,” applied to reduce each owner’s mortgage.
Since Rangel did not recall receiving regular reports of those distributions over the 20 years (reducing a mortgage in the neighborhood, I believe, of $75,000 down to zero), he first did not realize he owed taxes on the imputed income leading to the reduction of the mortgage principal. He made — to use two words that are less believed in Washington, perhaps, than any other two words — an honest mistake.
The amount of actual tax liability over this 20-year period turned out to be less than $10,000. (Indeed, after taking into account tax credits and depreciation, etc., it is possible that Rangel owed much less, or even nothing at all.)
Since it was an honest mistake and Rangel did not know he owed these taxes, my friend’s use of the expression “tax cheat” is simply wrong. In order to be a cheat, the act must be intentional. And if it were intentional, that would be a crime. The ethics committee made no such finding because — to repeat — the truth is, Rangel made an honest mistake.