Zelinsky: Rangel Episode Shows Need to Automatically Audit Tax Returns of Ways & Means Committee

Following up on my prior coverage of House Ways & Means Chair Rangel’s failure to report $75k of rental income from his condo in the Dominican Republic: Edward Zelinsky (Cardozo), Congressman Rangel’s Tax Returns and the Ghost of Wilbur Mills:

Predictably, Republicans have decried Congressman Rangel’s failure to comply with the tax law. Democrats, with equal predictability, have treated Representative Rangel’s problem as a nonevent. For members of the tax community, however, Congressman Rangel’s troubles evoke a more profound specter, the ghost of Wilbur Mills. …

Mills was the gold standard of a legislator, and our tax system is better for it. Mills mastered the details of the Internal Revenue Code as few, if any, other legislators have done in our nation’s history. Mills had a genuine concern about the quality of tax policy.

Moreover, Mills was not just concerned with the integrity of the tax law. He was equally sensitive to his ethical position as the nation’s chief tax writer. Mills famously prepared his own tax returns and took the standard deduction. He thought it unseemly for the Chairman of the House Ways and Means Committee to take the higher, legal deductions to which he was entitled.

Congressman Rangel blames his failure to report his full income on his accountant and wife as well as the operators of the condominium who provided little data. It is inconceivable that Wilbur Mills would have mounted such a defense. Indeed, it is inconceivable that Wilbur Mills would have made such a mistake. …

For the integrity of the tax system, Congressman Rangel’s problems could not have come at a worse time. While we do not know the precise number of U.S. citizens failing to report their off-shore incomes, the problem is serious. In such an environment, the failure of the Ways and Means Chairman, however inadvertently, to report off-shore income is, at best, troubling.

What should Congressman Rangel do? First, he should fess up. It will not do for the nation’s chief tax writer to blame the inaccuracy of his federal tax returns on his accountant, his spouse and his business partners. He should state, simply and publicly, that he failed the Mills standard.

Going forward, Congressman Rangel should announce that he will assume personal responsibility for his tax returns and will engage whatever professional assistance he needs to help him prepare those returns accurately.

Finally, Congressman Rangel should extract something positive from this episode by announcing that the federal income tax returns of all members of the Ways and Means Committee (including the Chairman) will automatically be audited annually.

Update: Rep. Rangel responds:

About the Author

Paul Caron

Paul Caron was named Duane and Kelly Roberts Dean of Pepperdine University School of Law on June 1, 2017. Dean Caron joined the Pepperdine faculty in 2013 after serving as the Dorothy and Leonard Straus Distinguished Visiting Professor of Law in the spring semesters of 2010 through 2013. He served as Associate Dean for Research and Faculty Development at Pepperdine in 2015-2017. Before coming to Pepperdine, he was Associate Dean of Faculty and Charles Hartsock Professor of Law at the University of Cincinnati College of Law.

7 responses to “Zelinsky: Rangel Episode Shows Need to Automatically Audit Tax Returns of Ways & Means Committee”

Bruce Bartlett

September 10, 2008

When I went to work at the Treasury Department in 1988 I discovered to my dismay that all senior officials there are routinely audited. I was audited for the three previous years. I escaped with a $29 refund, but some of my colleagues didn’t do so well.