The Corner

How Did Daschle Realize He Had a Limo Problem? And What About That Audit?

I have a new story up about Tom Daschle’s tax problems.  One of the key unanswered questions in the whole mess is why it suddenly occurred to Daschle, in June 2008, that the car and driver he had been provided by a wealthy Democratic donor in 2005, 2006, 2007, and 2008 might count as income and thus be subject to taxes — taxes which Daschle had not paid.  From the story:

Skeptics have suggested that Daschle recognized the problem in June 2008 because it was in that month that Barack Obama claimed the Democratic nomination. At that point, Daschle, a big Obama supporter, knew it was at least possible that he might get a big job in an Obama administration; therefore, he knew he had to get his financial affairs in order. On the other hand, there’s been the suggestion from some sympathetic to Daschle that he might have come to the realization after a casual conversation with some unnamed person, perhaps at a party.

Now, members of the Senate Finance Committee have had a chance to pose the question to Daschle himself. And the answer is: He doesn’t know.

“He said, ‘I don’t know, something caused me to think about it, and I hadn’t until then,’” says a Senate source familiar with Daschle’s account. “He has no idea why it occurred to him.”

“He’s been asked why he thought of it in June,” says another Senate source who is also familiar with Daschle’s account. “He didn’t seem to have an answer to that.”

Also: Did you know that Daschle had been audited by the IRS in 2006?

It has not been widely reported, but Daschle was audited by the IRS in 2006. There were no problems with the audit, but all sides concede that is because the IRS didn’t know that Daschle had been receiving the car service. If IRS investigators had known, they surely would have told Daschle that he owed the taxes. But Daschle didn’t tell the auditors about the car and driver; the audit occurred well before his June 2008 revelation that the car service was taxable.

Byron York is a former White House correspondent for National Review.

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