Campaign finance records bolster IRS case against Maldonado
October 4, 2012
California election finance records show that Republican congressional candidate Abel Maldonado raised $35,000 the same day as a 2007 party held on his behalf, which Maldonado’s family business claimed as a business expense on its federal income tax return [McClatchy].
The party occurred on December 5, 2007 while Maldonado was running for reelection to the state Senate. Though Maldonado’s family business, Agro-Jal Farming Enterprises Inc., wrote off a $3,686.03 catering fee from the party as a business expense, the Internal Revenue Service determined the party did not qualify as a business expense because it may have been a political fundraiser. State campaign finance reports showing 27 different donations totaling $35,000 on the same day seem to strengthen the IRS claim against Maldonado.
Now running for the newly drawn 24th Congressional District against Democratic incumbent Lois Capps, Maldonado told McClatchy he had no comment on whether or not the 2007 party was a campaign event.
Maldonado previously co-owned Agro-Jal with his father and brother but has distanced himself from the company since an IRS tax dispute arose. The IRS claims Agro-Jal underpaid its taxes by $3.6 million between 2006 and 2008 by writing off expenses that included a bathroom upgrade for Maldonado’s house, maintenance of two horses he owned and upkeep for a vacation condominium. Agro-Jal is currently fighting the IRS assessment in U.S. tax court.
In addition to the business tax dispute, Maldonado is also battling the IRS over a claim that he and his wife underpaid their personal taxes by about $470,000
Further, the California Fair Political Practices Commission could still pursue legal action against Maldonado for failure to report a campaign expenditure. While the four-year statute of limitations for a criminal case expired last year, the five-year opening for a civil case does not expire until December.
The same year as the alleged campaign party tax write off, Maldonado signed a pledge not to vote for any tax increases in California. Two years later, Maldonado voted for a $13 billion dollar tax increase to help close the looming state budget deficit.