Source: http://www.dailyherald.com/story/?id=98010&src=109

Governor calls story on flights 'ridiculous'
Doesn't answer question about asking tax attorney

Associated Press
Published: 12/19/200

SPRINGFIELD -- Gov. Rod Blagojevich said Tuesday it's "ridiculous" to suggest he might owe taxes for personal use of state aircraft.

The Associated Press reported this week that Blagojevich, his family and guests have taken hundreds of flights on taxpayer-financed airplanes with no clear business purpose. Tax experts said the Internal Revenue Service could consider the flights taxable fringe benefits.

The AP review estimated the value of the flights could add at least $225,000 to Blagojevich's income and leave him with a tax bill of $60,000 or more.

"That is the most ridiculous thing that's ever been written," Blagojevich told reporters at a Tuesday appearance in Mattoon.

He did not answer a reporter's question about whether he had ever spoken to a tax attorney about the matter or whether he would do so now.

Congress has cracked down on personal use of company aircraft in the past two decades and several government executives have faced questions about state-financed flights. They include former Virginia Gov. Douglas Wilder, former Massachusetts Lt. Gov. Jane Swift and former Arizona Gov. Jane Hull.

Blagojevich's own lieutenant governor, Pat Quinn, said it would make sense for Blagojevich to seek an outside expert's advice.

"The best way to go is for the governor to have a sophisticated tax lawyer take a look at the issue and answer any, any questions," Quinn said Monday.

Tax experts told the AP the IRS likely would consider Blagojevich's principal place of business to be Springfield, the seat of state government. That means anytime he flies to his hometown Chicago with no job-related event planned, it's a personal flight and he either must reimburse the state or pay taxes on the value as income.

But Blagojevich aides said the analysis is flawed because the governor's main office is in Chicago, not the Capitol.

The Illinois Department of Revenue, which could collect state tax revenue if Blagojevich were found liable for the trips, agrees with the governor. General counsel John McCaffrey told the AP last week that the governor's base of operations is Chicago, so "his travel to Springfield was all for legitimate business reasons."

Blagojevich is not the first officeholder to come under scrutiny.

When Jane Hull became Arizona's governor in 1997, she promised not to use aircraft for personal use. Her predecessor, Fife Symington, who resigned after he was convicted of bank fraud, had been criticized for personal use of airplanes.

But news reports in 2001 detailed more than 100 personal trips on state planes to weekend retreats and questioned whether Hull owed taxes. She later announced she would have accountants review the trips for tax liability, but no resolution ever was made public before she left office in 2003.

Former Virginia Gov. Douglas Wilder resolved a tax issue with the IRS for personal helicopter flights he took in 1990. And then-Lt. Gov. Jane Swift of Massachusetts was criticized for a state-financed helicopter trip home to avoid Thanksgiving 1999 traffic.