Capps failed to report some rental income for about 5 years

mdoyle@mcclatchydc.comAugust 2, 2012 

Lois Capps


WASHINGTON — Tax questions turned around and nipped Rep. Lois Capps, D-Santa Barbara, on Thursday, with revelations that she had not fully reported rental income for about five years.

The belatedly reported income came from one of Capps’ campaign and congressional staffers, who rented a room in her Santa Barbara residence from 2001 to 2005. Though Capps’ accountant finally reported the rental income to the House in 2006, Capps only filed amended tax returns with the Internal Revenue Service this year.

First reported by The Daily Caller, an online periodical with conservative sympathies, Capps’ tax fumble followed several months in which her campaign has attacked Republican challenger Abel Maldonado for his own tax woes.

“Once I realized there was a mistake, I immediately fixed it. I would hope my opponent would do the same,” Capps said in a statement.

All told, Capps had failed to report $41,480 in rent paid between 2001 and 2005 by then-staffer Jeremy Tittle. In belatedly filing the amended tax returns, Capps also had to pay $8,819 in additional taxes.

Republicans quickly leapt to the attack, with National Republican Congressional Committee spokesman Daniel Scarpinato declaring that Capps can’t be trusted “when she spent a decade hiding portions of her income and hoping it never came to light.”

“There are a lot of questions that Congresswoman Capps has to answer about this financial arrangement,” Maldonado campaign spokesman Kurt Bardella added.

Maldonado’s own complicated tax issues include a $470,000 dispute between his family farm in Santa Maria and the IRS, which is now being fought out in U.S. Tax Court.

Separately, the Los Angeles Times reported earlier this year that the Maldonado family farm is disputing an IRS claim that it underpaid taxes by more than $3.6 million between 2006 and 2008.

At the request of McClatchy newspapers, Capps publicly posted her tax returns. The Maldonado campaign told McClatchy in mid-June that Maldonado would do the same.

“We will be providing the return in the very near future,” Maldonado’s campaign manager Brandon Gesicki told McClatchy in mid-June.

But on July 25, citing the ongoing tax dispute, the Maldonado campaign said in a statement that the former lieutenant governor has filed for a deadline extension on his return.

None of his returns have been posted.

“The amended (Capps) returns are on her website and everybody can look at them,” Capps campaign spokesman Jeffrey Millman said Thursday. “And this is exactly why it's so important for Mr. Maldonado to publicly release his taxes for every year he's been in public office, to make sure that he has properly paid what he owes.”

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