Rangel Tax Proposal Benefits Donors

by Matt Margolis :: November 8, 2007 1:04 PM

This undoubtedly deserves to be invested by the House Ethics Committee and the DOJ:

The chairman of the House Ways and Means Committee has proposed legislation that would effectively halt some current tax audits of people who get a tax break for living and operating a business in the United States Virgin Islands.

Many beneficiaries of the tax break are campaign contributors to the lawmaker, Representative Charles B. Rangel, Democrat of New York, according to data collected by CQ MoneyLine, which tracks political contributions.

At least one of them, Richard G. Vento, is currently under audit, according to court filings. Mr. Vento gave $4,400 last year to the Baucus-Rangel Leadership Fund, which supports Mr. Rangel and Senator Max Baucus, the Montana Democrat who heads the Senate Finance Committee.

Beneficiaries of the tax break including Michael W. Masters and Richard H. Driehaus, money managers, accounted for more than half the $51,900 that individuals in the Virgin Islands gave last year to Rangel for Congress, the chairman’s campaign organization. Mr. Rangel raised almost three times as much from such donors last year as in any other year in the MoneyLine database.

Mr. Rangel’s proposal would end any such audits involving years before 2004. That upsets Senator Charles E. Grassley, an Iowa Republican responsible for legislation that year that tightened rules governing taxes on Americans in the Virgin Islands.

“Congress rarely takes action that affects ongoing I.R.S. audits,” Mr. Grassley said in a statement, “so it’s striking that House leaders are proposing changes in the statute of limitations for U.S. taxpayers who are newly claiming residency in the Virgin Islands.”

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