Md. revokes NY congressman's tax credit

March 13, 2009 - 2:36pm

ANNAPOLIS - Maryland tax officials say a New York congressman isn't entitled to thousands of dollars in tax breaks for a nearly $1 million home in a Washington, D.C., suburb he's claimed as his primary residence for at least 10 years.

Democratic Rep. Eliot Engel represents the Bronx, calling himself a lifelong resident of the borough where he rents an apartment. But he and his wife list the house in Potomac as their primary home on Maryland property tax forms.

They paid nearly $500,000 in 1993 to buy the house in the suburb that newsman Ted Koppel and "Wonder Woman" Lynda Carter have called home. It's almost doubled in value, and Engel has collected thousands of dollars in tax credits reserved for people who declare Maryland home.

Engel isn't the only politician who's been found to be improperly receiving the credit. Another congressman, some U.S. senators and several Maryland legislators have also been tripped up by the requirements.

Maryland tax officials first revoked Engel's credit in late 2005, around the time several elected officials representing other states were informed they'd have their credits removed. Unlike most of the others, however, Engel and his wife contested the loss of their Maryland primary residence status, which was reinstated until Maryland laws recently strengthened enforcement.

"When it does happen, it gets enough attention that we'll get an aide to other congressmen who'll call us up and say they want to make sure they're not caught in this," said Robert Young, associate director of the Maryland Department of Assessments and Taxation.

Engel aide Jeremy Tomasulo maintains that Engel's primary residence has always been in the Bronx.

But his property tax documents say otherwise, a claim that has netted Engel and his wife nearly $7,000 in credits over the past four years alone. That's because in Maryland, people are eligible for state and county tax breaks on their primary residence. The credit puts a cap of up to 10 percent on the amount of a home's increased value that can be taxed each year.

But to receive it, homeowners must live in Maryland at least six months of the year, have a Maryland driver's license, be registered to vote in Maryland, have any cars they own registered in Maryland and file Maryland income taxes.

Engel and his wife don't qualify since they both have New York licenses and voter registration cards. Tomasulo says the congressman files his income taxes in New York, but he did not respond to questions about Engel's wife's taxes.

Engel aides say the congressman previously responded to an inquiry by the Montgomery County Department of Finance and it determined he was eligible for an exemption.

Roberta Ward, manager of the Montgomery County office of the Maryland Department of Assessments and Taxation, said her office handled that inquiry in late 2005. She said Engel's primary residence claim was revoked, but was reinstated after an appeal that included the submission of the Maryland income tax records for his wife.

Since then, however, Maryland has tightened the eligibility requirements following an audit indicating thousands of people claimed the credit for more than one home, for properties they rent out or for other non-eligible properties. Now, homeowners must apply for the credit and at least one spouse of a homeowning couple must meet all residency requirements.

"If you've got conflicting information and we're aware of it, then the burden is on you to establish your residency," Young said.

Tomasulo said the congressman believes the credit should be removed if he is not eligible.

"He will await their determination of his status and will make sure that he is in full compliance with their evaluation," Tomasulo said in an e-mail.

Engel was re-elected at least five times to represent the Bronx while property tax documents indicated his primary residence was in Potomac.

New York and federal laws require only that congressmen be an inhabitant of the state they represent when they are elected. New York Board of Elections spokesman John Conklin said the state does not check whether officials are residents.

"If an outside person or citizen believes somebody doesn't meet the qualifications they can bring actions to court or the legislative body where the official serves," Conklin said.

Kathleen Hayes, a teacher who lives in Engel's New York district, said she's less concerned about where he lives than whether he's unfairly getting tax breaks.

"He's an individual as well as a congressman, and if he's not paying his share, that means others are paying more," Hayes said. "That would be a problem for me."

Maryland tax officials say they will not ask Engel to pay them back for the credits he's received.