Bush urged to head off abuse of tax benefit

WASHINGTON – Senate Finance Committee Chairman Charles Grassley, R-Iowa, and the committee’s ranking Democrat, Sen. Max Baucus of Montana, on Friday urged President Bush to help shut down a tax loophole that allowed his secretary of Health and Human Services to claim more than $1 million in tax deductions for “gifts” that have been used to further his family’s interests.

Grassley and Baucus, responding to a report in Friday’s Washington Post, wrote Bush to ask for his support in saving a provision in an embattled pension bill that would rein in what they called an abuse of the charity tax code. And they said the issue could be taken care of through regulatory changes that are in the Bush administration’s control.

“Your IRS Commissioner, Mark Everson, has done a fine job of highlighting these problems, but now the rest of your administration needs to pitch in and rewrite these regulations and end the abuse,” Grassley and Baucus wrote. “We ask that you direct Treasury and (the Office of Management and Budget) to make a priority of rewriting these regulations in the next six months.”

The issue received new attention this week when it was revealed that Health and Human Services Secretary Mike Leavitt and his family have claimed millions of dollars in tax deductions for contributions to a family foundation that until recently has given little to charity. Instead, through loans and investments, the Dixie and Anne Leavitt Foundation has used its $9 million fortune to further the family’s real estate holdings, insurance interests, and even the Leavitt family genealogical society.

In 2002, the foundation loaned $332,000 to Leavitt Land and Investment Inc., in which the secretary owns a significant stake. That same year, Leavitt Land and Investment extended an interest-free loan to Leavitt in the form of stock valued at between $250,001 and $500,000, according to a recent financial disclosure.

Everson has labeled such transactions one of the IRS’ “dirty dozen” top tax dodges, and a provision under negotiation in a major pension bill would curb them. Under the provision, entities such as Leavitt’s, known as Type III supporting organizations, would be prohibited from offering loans to parties related to the fund, and would have to give away 5 percent of their assets each year, just as standard foundations are required to do.

Leavitt released a statement Friday defending his actions and noting that the foundation has increased its giving substantially, from $52,312 in 2003 to $691,221 so far this year.

Talk to us

More in Local News

Chap Grubb, founder and CEO of second-hand outdoor gear store Rerouted, stands inside his new storefront on Thursday, Sept. 21, 2023, in Gold Bar, Washington. Rerouted began as an entirely online shop that connected buyers and sellers of used gear.  (Ryan Berry / The Herald)
Used outdoor gear shop Rerouted finds a niche in Gold Bar

Seeking to keep good outdoor gear out of landfills, an online reselling business has put down roots in Gold Bar.

Naval Station Everett. (Chuck Taylor / Herald file)
Everett man sentenced to 6 years for cyberstalking ex-wife

Christopher Crawford, 42, was found guilty of sending intimate photos of his ex-wife to adult websites and to colleagues in the Navy.

Snohomish County Executive Dave Somers speaks to the crowd during an opening ceremony at the new PAE2 Amazon Fulfillment Center on Thursday, Sept. 14, 2023, in Arlington, Washington. (Ryan Berry / The Herald)
Snohomish County executive pitches $1.66B budget

Snohomish County Executive Dave Somers announced his proposed budget Tuesday afternoon. Public comment is slated to begin Oct. 10.

A memorial for a 15-year-old shot and killed last week is set up at a bus stop along Harrison Road on Wednesday, Sept. 13, 2023, in Everett, Washington. (Ryan Berry / The Herald)
Teen boy identified in fatal shooting at Everett bus stop

Bryan Tamayo-Franco, 15, was shot at a Hardeson Road bus stop earlier this month. Police arrested two suspects.

Mt. Baker visible from the summit of Mt. Dickerman on a late summer day in 2017. (Caleb Hutton / The Herald)
Hornets pester hikers on popular Mountain Loop trails

“You cannot out run the stings,” one hiker wrote in a trip report. The Forest Service has posted alerts at two trailheads.

A view of a 6 parcel, 4.4 acre piece of land in Edmonds, south of Edmonds-Woodway High School on Wednesday, Sept. 20, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)
Housing authority seeks more property in Edmonds

The Housing Authority of Snohomish County doesn’t have specific plans for land near 80th Avenue West, if its offer is accepted.

Nursing Administration Supervisor Susan Williams points at a list of current COVID patients at Providence Regional Medical Center on Friday, Sept. 22, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Dozens of Providence patients in medical limbo for months, even years

About 100 people are stuck in Everett hospital beds without an urgent medical reason. New laws aim for a solution.

Emergency responders surround an ultralight airplane that crashed Friday, Sept. 22, 2023, at the Arlington Municipal Airport in Arlington, Washington, resulting in the pilot's death. (Ryan Berry / The Herald)
Pilot dead in ultralight plane crash at Arlington Municipal Airport

There were no other injuries or fatalities reported, a city spokesperson said.

One of Snohomish County PUD’s new smart readers is installed at a single family home Thursday, Sept. 21, 2023, in Mill Creek, Washington. (Ryan Berry / The Herald)
PUD program seeks to make energy grid smarter for 380K customers

The public utility’s ConnectUp program will update 380,000 electric meters and 23,000 water meters in the next few years.

Most Read