Sunday, October 5, 2008

DID MCCAIN FUDGE HIS INCOME TAX RETURN?

Martha Miller, Huffington Post - I am a tax attorney, so a tax return means more to me than it would to most. I reviewed McCain's tax returns as a basic check on the candidates. You can look at McCain's 2006 and 2007 tax returns for yourself. The tax returns are below a lot of verbiage about his charitable activities.

According to a New York Times article of September 27, 2008 "For McCain and Team, a Host of Ties to Gambling," reported by Jo Becker and Don VanNatta Jr., McCain gambled at the MGM Grand in May 2007. Apparently McCain is a habitual gambler; he usually plays craps. He even says, "I am a gambling man."

Gambling has tax implications. According to IRS Publication 17, "Your Federal Income Tax", 2007 edition, page 89 "Gambling Winnings. You must include your gambling winnings in income on Form 1040, line 21. If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings." In other words, you can't subtract your losses from your winnings and just not report. You have to report the winnings, and then claim the losses.

But McCain's tax returns say nothing about gambling winnings or losses.

As a casino gambler, McCain is likely to have lost more than he won. But by not reporting his winnings, the different percentage calculations built into the tax calculation are thrown off, and if he gambled much at all, he has underpaid his tax. The amount of understatement of tax may be minimal, but that's not the point.

The real purpose of preparing his tax return and omitting the gambling winnings is so that people would not know how much he gambled. If he won $200,000 playing craps in Las Vegas, it would make a difference in the way voters viewed his suitability as a presidential candidate.

There are circumstances under which the tax returns could be correct, such as McCain gambled once in 2007, not at all in 2006, and lost everything the one time he gambled. Such an explanation is unlikely in light of McCain's alleged long history of gambling.

Stephen Rose, Huffington Post - McCain is a documented craps player. He has been known to play craps on impulse for 14 hours at a stretch. . .

Connie Bruck puts it like this: "The moment the car stopped at McCain's hotel in downtown New Orleans, he set out at his usual fast clip for Harrah's, across the street. McCain is an avid gambler. Wes Gullett, a close friend who worked for McCain for years, told me that they used to play craps in Las Vegas in fourteen-hour stints, standing at the tables from 10 a.m. to midnight. 'Craps is addictive,' McCain remarked, and he headed for the fifteen-dollar-minimum-bet tables."

Michael Scherer and Michael Weisskopf say: "Over time he gave up the drinking bouts, but he never quite kicked the periodic yen for dice. In the past decade, he has played on Mississippi riverboats, on Indian land, in Caribbean craps pits and along the length of the Las Vegas Strip. Back in 2005 he joined a group of journalists at a magazine-industry conference in Puerto Rico, offering betting strategy on request. 'Enjoying craps opens up a window on a central thread constant in John's life,' says John Weaver, McCain's former chief strategist, who followed him to many a casino. 'Taking a chance, playing against the odds.' Aides say McCain tends to play for a few thousand dollars at a time and avoids taking markers, or loans, from the casinos, which he has helped regulate in Congress. 'He never, ever plays on the house,' says Mark Salter, a McCain adviser. The goal, say several people familiar with his habit, is never financial. He loves the thrill of winning and the camaraderie at the table.

"Only recently have McCain's aides urged him to pull back from the pastime. In the heat of the G.O.P. primary fight last spring, he announced on a visit to the Vegas Strip that he was going to the casino floor. When his aides stopped him, fearing a public relations disaster, McCain suggested that they ask the casino to take a craps table to a private room, a high-roller privilege McCain had indulged in before. His aides, with alarm bells ringing, refused again, according to two accounts of the discussion. He clearly knows that this is on the borderline of what is acceptable for him to be doing," says a Republican who has watched McCain play. 'And he just sort of revels in it.'

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