Palin's Taxes

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October 03, 2008 7:40 PM

ABC News' David Wright, Alyssa Litoff and Imtiyaz Delawala report: After significant pressure from the Obama-Biden campaign, the McCain-Palin campaign today finally released the 2006 and 2007 tax returns for Sarah and Todd Palin, along with a public financial disclosure document the candidate recently filed in connection with her bid for the vice presidency.

The documents paint the picture of a well-to-do middle class family with two income earners. Palin is clearly the primary breadwinner, earning more than twice as much as her husband, even though the so-called "First Dude" operates two businesses –- commercial fishing and income from snowmobile racing.

According to the most recent return, Todd Palin's fishing business grossed less than $50,000 in 2007 for a profit of $15,513. His snow machine racing business grossed $17,000 but home office expenses meant that he claimed a net loss of nearly $10,000.

It is, however, Sarah Palin’s income that is liable to draw the scrutiny of tax authorities. And it is not immediately clear whether the figures detailed in these newly-released forms will resolve questions that have already been raised.

Of particular interest: roughly $17,000 in state-issued per diems for evenings spent in her own home in Wasilla. The Washington Post recently reported that the per diems and associated travel costs from the state capital in Juneau for Palin’s family could mean a tax liability of more than $60,000 for Palin’s first year and a half as governor.

The address listed on the 1040’s is Palin's family home in Wasilla, which would seem to suggest Palin considers that, not the governor’s mansion in Juneau, her "tax home." However the McCain-Palin campaign maintains that her “tax home” is technically the governor's mansion in Juneau.

The point is potentially significant because any per diems and travel reimbursements received in connection with someone’s “tax home” would likely be taxable as income. According to IRS regulations: "If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. You also cannot deduct the cost of meals and lodging while at your tax home."

The IRS also strictly forbids deductions for expenses incurred bringing a spouse and kids along on a business trip. Tax authorities say any reimbursement for travel costs for family members would likely incur income taxes.

But Palin’s tax returns indicate she paid no taxes on the disputed per diems and travel expenses.

The McCain-Palin campaign insists Palin did not owe taxes on the per diems because of an understanding reached between the IRS and the Alaska Division of Finance, giving the state broad discretion in determining whether such reimbursements are taxable. (“Income Tax Implications Of Long-Term Per Diem”)

The campaign also issued an advisory letter dated September 30, 2008 by Washington tax attorney Roger M. Olsen stating that: “she is entitled to meal and incidental allowance payments when away from her duty station and tax home performing services for her employer; it is not relevant that she spends the night at her family home rather than in government paid lodging.”

Finally, the campaign insists she saved the state money hundreds of thousands of dollars on her travel costs, compared to previous Alaska governors.

However, a Washington tax attorney who supports Obama disputes that argument.

"She's using her state office as a means to generate a favorable tax status for herself," he said. "You and I couldn't do that."

There also appears to be a discrepancy between the income Palin reports to the IRS and the income listed on the public financial disclosure reform she recently filed in conjunction with the campaign.

That form lists her income as governor of Alaska as $196,531.50. However that’s greater than the combined income with Todd Palin she reported on her 2007 1040: $151,556. The W-2 form submitted for 2007 lists her wages and other compensation at $107,987.

Which begs the question: what happened to that extra $88,544? According to the McCain-Palin campaign, the additional amount represents the salary Palin earned in 2008, during the period not covered by the 2006 and 2007 tax returns.

Palin makes no separate accounting of travel expenses and reimbursements on the public financial disclosure form. Although the form does include a space for listing reimbursements from any one source over $260, the form simply says, “Not Applicable to candidate.”

October 3, 2008 | Permalink | User Comments (520)

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I can't wait for her to make the argument that she doesn't have to pay Federal Income Taxes because Federal Income taxes are unconstitutional!! Welcome to "The Fringe" Sarah!

Book her, Dano!

Posted by: thebob.bob | Oct 3, 2008 7:54:22 PM

I'm not concerned with Governor Palin's tax returns. I am concerned about all the lies Obama has told. I am concerned with Obama's ties to terrorists, anti-Americans and the corrupt "organizations" he has been associated with.

OBAMA IS THE "GOLDEN BOY" SELECTED BY THE DNC AND BIASED MEDIA.

I watched the debate between Governor Palin (5 weeks of national debate experience) versus Senator Biden (35 years of national debate experience).

Obviously, she is a quick study. Just imagine what she will be like after four years as vice president! She has been a Mayor and a Governor. She is more qualified than anyone running.

John McCain showed great judgment in choosing her.

It's too bad the DNC and biased media didn't "select" Biden or Hillary. OBAMA HAS BASED HIS ENTIRE CAMPAIGN ON LIES. HE HAS TOO MANY TIES TO TERRORISTS AND ANTI-AMERICANS. DON'T FORGET "God Damn America" JEREMIAH WRIGHT, PFLEGER, FARRAKHAN, AYERS, REZKO (TO NAME A FEW). BARACK HUSSEIN OBAMA IS A DANGER TO OUR COUNTRY. Obama's ties to organizations like "ACORN" caused much of the country's mortgage foreclosure issues. ACORN IS UNDER INVESTIGATION FOR "VOTER FRAUD" IN MANY STATES! Obama is a wolf in sheep's clothing.

I'm voting for the Honorable John McCain in November.

STOP THE DRAMA - NO OBAMA!

GET A BRAIN - VOTE McCAIN!

Posted by: REPLACE DO-NOTHING DEMS IN CONGRESS! | Oct 3, 2008 7:59:38 PM

She doesn't have to pay full taxes because she can see the tax man from her house.

Posted by: JR | Oct 3, 2008 8:03:10 PM

"GET A BRAIN - VOTE McCAIN!"

Yeah, you need to find one if your going to vote for McSame.

Posted by: JR | Oct 3, 2008 8:04:56 PM

Flying the kids around and Todd from place to place should not be done by the taxpayer. By not claiming the reimbursed expenses, the taxpayer is doing it.

What happened to the $17,000 in gifts? She didn't claim hardly any gifts. $2,500?

Todd's hobby also can only be considered a business if he makes money on it at least 2 of every five years.

Also, they didn't tithe 10%. They donated a bunch of junk to the Salvation Army on December 31, 2007 for the tax write off.

Hypocrites.

Posted by: trifecta | Oct 3, 2008 8:05:19 PM

I wonder where the money went, sure wasn't for condoms for her kids.

Posted by: JR | Oct 3, 2008 8:06:19 PM

Sarah Palin Son Track Palin Going To Iraq To Avoid Jail Time?
By Dylan on Sep 6, 2008 in US News |

Sarah Palin Son Track Palin Going To Iraq To Avoid Jail Time? - Sarah Palin’s son Track Palin has joined the army to avoid going to prison.Track Palin is not going to Iraq because he is patriotic but because he was arrested,for vandalizing the brakes of a school bus,in order to avoid jail he enlisted himself in the army.Track Palin will be performing security duties for his brigade’s top officers in Iraq starting on September 11, 2008.That’s all we have for now on Sarah Palin Son Track Palin Going To Iraq To Avoid Jail Time?

Posted by: jj | Oct 3, 2008 8:07:37 PM

McSame/Failin 00

We've had losers for 8 years, why stop now?

Posted by: JR | Oct 3, 2008 8:07:39 PM

Palin is failin'
Voting McCain is insane

Posted by: another poet | Oct 3, 2008 8:11:15 PM

You know how Sarah Palin became a hockey mom?

Her son Track Palin was caught vandelizing school buses, cutting the brakes. A bus driver realized the vandelism and was able to preven a catastrophe. He gets sent to Michigan where he plays "HOCKEY".

Sarah Palin Son Track Palin Going To Iraq To Avoid Jail Time?
By Dylan on Sep 6, 2008 in US News |

What a bunch of THUGS, this Palin family

Posted by: walterL | Oct 3, 2008 8:11:44 PM

You know how Sarah Palin became a hockey mom?

Sarah Palin Son Track Palin Going To Iraq To Avoid Jail Time?
By Dylan on Sep 6, 2008 in US News |

What a bunch of THUGS, this Palin family

Posted by: walterl | Oct 3, 2008 8:12:42 PM

Replace: You are an idiot...and I say that with all due respect.

Posted by: dano | Oct 3, 2008 8:12:54 PM

Biden's Bracelet moment

Say it ain't so Joe! Katie's restaurant in Wilmington closed at least 20 years ago. Biden and his home spun stories.

Posted by: geevill | Oct 3, 2008 8:15:24 PM

AFTER THE BLATANT AND STUNNING SEXISM LAUNCHED AGAINST THE HILLARY CLINTON PRESIDENTIAL CAMPAIGN by Barack Hussein Obama and the liberal media, democratic Hillary supporters were thrilled to hear John McCain announce Gov. Sarah Palin as his running mate, because, she offers Americans a chance to vote for someone who is her own woman, and who represents a party that, while we don't agree on all the issues, at least respects women enough to take them seriously.

HAVING A WOMAN IN THE WHITE HOUSE, AND NOT AS THE SPOUSE, IS A CHANGE WHOSE TIME HAS COME, despite the fact that the media and Democratic Party leaders have decided otherwise. But with the Sarah Palin’s nomination, Clinton voters, in particular, have received a political wake-up call they never expected. Having watched their candidate and their principles betrayed by the very people who are supposed to be the flame-holders for equal rights and fairness, they now looking across the aisle and see a woman who represents everything the feminist movement claimed it stood for. Women can have a family and a career.

THE DEMOCRATIC PARTY’S BULLYING OF THE CLINTON CANDIDACY DURING THE PRIMARY SEASON WAS THE FIRST REVELATION OF HOW MISOGYNISTIC AND SEXIST THE DEMOCRATIC PARTY HAS BECOME. The democratic party has moved from taking the female vote for granted to outright contempt for women. That's why Sarah Palin represents the most serious conservative threat ever to the modern democratic liberal claim on issues of male cultural and social superiority.

THE TIME IS NOW FOR A WOMAN TO BE IN THE WHITE HOUSE AS AN EQUAL PARTNER IN GOVERNANCE.

COUNTRY FIRST! JOHN MCCAIN/SARAH PALIN

Posted by: Manolete | Oct 3, 2008 8:15:59 PM

According to Stateline, the Governor's Salary in Alaska was $125,000 per year for Alaska in 2007. She took office in December, so she should have been paid the entire $125,000.

The $17,000 in per diem, $49,800 in travel for her family, are not reported as income. The gifts are underreported by a factor of 10.

Posted by: trifecta | Oct 3, 2008 8:22:20 PM

BREAKING: The blogs are reporting Palin did a porn video while in college in Idaho. It is reported that Larry Flint is negotiating for the exclusive rights to sell it. It was an amatuer video entitled "Nailin' Palin." Watch this story take off like widfire this weekend!

Posted by: dano | Oct 3, 2008 8:24:12 PM

Another Friday night tax dump from the McCain campaign. Straight talking mavericks? Please, its more like an aged hack and his trailer park queen.

Posted by: DMR | Oct 3, 2008 8:26:06 PM

For Sarah Palin to keep bragging that she is a hockey mom under the circumstances that she became one, is so hypocritical.

So her son gets arrested for vandelizing school buses, gets sent to a juvenile delinquent school where he plays hockey...and she's proud of that?

I'm outraged! She should be forthcoming about that story if she's going to use that term to define herself.

Posted by: nancy | Oct 3, 2008 8:29:06 PM

Where is the much discussed per diem that Governor Palin received for staying in her own home? It is not reported on the Palin's 2007 tax return. I believe that the gross income is $227514.00 with expenses for fishing and snowmobile racing their adjusted gross income is $166090.00. Why is the racing considered a business and not a hobby? Is a plane a necessary fishing expense? With itemized deductions and the exemptions they paid tax on $124921.00 Do the three oldest children file their own tax returns to report the Alaska PFD? Why is their return by H&R Block?

Posted by: u want to know | Oct 3, 2008 8:31:31 PM

"Most [tax revisions] didn't improve the system, they made it more like Washington itself: complicated, unfair, cluttered with gobbledygook and loopholes designed for those with the power and influence to hire high-priced legal and tax advisers". -- Ronald Reagan

Posted by: julie | Oct 3, 2008 8:32:38 PM

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