Palin's Settlement To Pay State For Children's Travel Doesn't Address Potential Tax Issues

[Purveyor]

JUNEAU, Alaska - Gov. Sarah Palin's agreement to reimburse the state for trips her children took at government expense does not address potential tax problems she might face for charging Alaska thousands of dollars for their travel, lawyers handling the settlement said.

Palin already is drafting changes to her 2007 and 2008 tax returns, spokesman Bill McAllister said. This comes after learning that she is responsible for taxes on personal use of a state vehicle and nearly $18,000 she improperly collected as expenses from the state while staying at her Wasilla home about 40 minutes from Anchorage.

Palin now will show those benefits as income for tax purposes. Lawyers negotiating a settlement over state payments for her children's travel said Thursday they did not consider whether Palin also should include that benefit as income in her taxes.

"That's not anything I examined," said Timothy Petumenos, a lawyer hired by the Alaska Personnel Board to investigate an ethics complaint filed against Palin after The Associated Press reported in October that she charged the state for her children's travel.

Instead, Petumenos focused only on issues related to the state ethics law, and whether the payments to Palin amounted to an inappropriate personal benefit.

AP: http://tinyurl.com/cxybhj