A soap opera fit for Los Angeles has come to D.C. in the form of Tareq and Michaele Salahi.
Pictures of the White House State Dinner Gate-Crashers with Bill Clinton, Oprah Winfrey, the Redskins Cheerleaders and Barack Obama (again) at a fundraiser show the pair enjoyed “mingling with the stars” and apparently hit more events than many of us would have the ability to attend even if we did not have other jobs in order to pay our bills.
As more details emerge about the couple, it appears that that was the key. This couple had plenty of time to attend parties, because paying their bills was not a priority for the pair. In fact, it ranged from walking out on caterers to ignoring an obligation to file Federal Tax Returns (from TaxGirl):
For the most recent bankruptcy, the company claims about $335,000 in assets and $965,000 in liabilities, though that number for liabilities could go much higher. The IRS is listed as a creditor, though exactly how much has not been determined, as the company has not filed corporate taxes since tax year 2006 (yes, if you’re making a timeline, the due date would have been in the year that Tareq and Michaele took over from his parents).
Though the filings indicate that the winery operated at a loss, the company is said to have grossed $1.7 million in 2007 (reports are that the gross was $35,000 in 2008).
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But what is disconcerting is how much access these folks seem to have to… well… everything… when they’re not even filing their taxes. While they assert that the winery was operating at a loss, they have been spending like it hasn’t been, even buying up luxury skyboxes to see the Redskins (one hopes that they are familiar with the IRS limitations on skybox deductions) and spending tens of thousands of dollars on (unpaid) credit card charges. It will be interesting to see whether the IRS challenges the legitimacy of any of what, I’m assuming, will be characterized as deductions once the returns are filed. But again, that’s yet to be determined as the returns have not even been filed.
While some have called for the couples’ arrest for attending the state dinner uninvited, the law will not have to be stretched in that way to put this couple in hot water with the federal government, nor should it. This couple wanted to be in the limelight and will now likely be subject to some real scrutiny by the IRS for repeatedly failing to file returns. Failure to file and failure to pay penalties from 2006 corporate tax returns (due March 2007) are now about 40% of the tax due in addition to interest due on any amount unpaid.
The couple wanted the limelight, and now they will likely see the scrutiny that comes with it in Washington. They should ask Sen. Daschle about such things.
Chris is an attorney working in the private sector in New York City. He served as co-chair of field operations for McCain Manhattan during the 2008 campaign (which became famous for having the audacity to promote itself on the Upper West Side).
