I start the week off with an apology: I have missed many of your collective parties, happy hours and other social occasions. I was under the impression that I needed to be invited to these events in order to attend. Thank goodness for Tareq and Michaele Salahi, to set me straight.
The Salahis are, as you probably know by now, the infamous “White House party crashers.” The Virginia couple have been accused of attending President Obama’s first White House state dinner without an invitation. It’s not the first accusation that’s been hurled their way: they’ve been named in at least 16 different civil suits in Virginia. The lawsuits include unpaid bills from the couple’s elaborate wedding (self-dubbed the “wedding of the century”) and on ongoing family feud over the Oasis Winery.
Ah, the winery. The winery is thought to be the source of the Salahi’s alleged wealth. However, it hasn’t been doing so well. According to CNN, the winery has been the subject of two bankruptcy filings: a Chapter 11 (reorg) under Tareq’s parents’ leadership and a more recent Chapter 7 under Tareq’s leadership.
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).
It doesn’t stop at the feds. In 2008, at least one tax lien was filed against Oasis Winery by the Commonwealth of Virginia. That lien, according to court records, has since been released. It has not been disclosed whether state and local tax returns were otherwise timely filed (my guess: no).
It’s still up in the air as to whether the Salahis have actually broken the law by attending the White House dinner without an invitation. That’s between the Secret Service and the Salahis (or their attorneys).
And I don’t think any resolved tax liens account for much. It just makes for good copy.
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.
Also questionable? Tareq Salahi’s charitable organization, Journey for the Cure. There has been a lot written about how Tareq may have spent funds related to the organization (including the possibility that funds may have been directed to a political campaign). On the tax side, however, there’s nothing more damning than this warning directly from the Virginia Department of Agricultural and Consumer Services:
The Virginia Department of Agriculture and Consumer Services’ Office of Consumer Affairs cautions consumers that Journey for the Cure Foundation, 14141 Hume Road, Hume, Virginia, has solicited contributions from Virginia citizens for allegedly charitable purposes. However, as of May 13, 2009, this organization has not registered with or been granted the appropriate exempt status by the Commissioner as required by law. Therefore, contributors are cautioned that their contributions to such organization may be used for non-charitable purposes.
Since the state posted that statement, an extension has been requested; that extension expired on November 15, 2009. The Commonwealth of Virginia has not indicated that an update is available.
So, not filing returns and operating a questionable charitable organization is apparently the ticket to meeting the powers that be at the White House. See, you and I have been going about it all wrong…
Even so, I am having a holiday party shortly. I will not be checking invites at the door – but the dog will be there to perform a smell test.Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.