Eye On Boise

MONDAY, AUG. 15, 2005, 1:48 P.M.

Could it be taxable?

Idaho Democratic Party Chairman Richard Stallings has written a formal letter to the IRS asking whether, if a public official spends campaign money for personal expenses, that money becomes taxable income.

Attached to his Aug. 12 letter were copies of Gov. Dirk Kempthorne’s latest campaign finance report and of newspaper articles about the report. “It would appear that a significant number of the expenditures are of a particularly personal nature,” Stallings wrote to Mark W. Everson, commissioner of the IRS. He cited a December, 2004 expenditure of $81.70 at a bookstore at Sun Valley; a $173 charge at the U.S. Senate gift shop in January; a charge for flowers in Boise in February; a $3.98 charge at Starbucks in Washington, D.C. on Feb. 27; and charges at Boise stores including Ridley’s grocery story, Idaho Camera and the Chocolate Bar, a downtown sweetshop.

“The issue, Commissioner Everson, is this: are such obviously personal expenditures when financed by a third party or parties, in this case campaign contributions, subject to federal taxation? I am under the impression that when an individual is able to supplement his or her personal income, from whatever source, and then utilize those resources for personal benefit, that such income must be reported to the IRS and would be subject to federal and state income tax laws,” wrote Stallings, a former four-term Idaho congressman.

Stallings requested an IRS review, and “in order to inform the citizens of Idaho, a statement as to whether such expenditures, which are claimed as a legitimate function of a public officeholder are, in fact, in compliance with federal tax law.”


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