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Tierney vs. Globe on Tax Returns

The 6th District congressman is on defense with the newspaper.

Congressman John Tierney is facing a new controversy this week, this time involving his tax returns.

Tierney is planning to release his tax returns today, but The Boston Globe reported that Tierney had promised to give them his tax returns in July but then declined to do so. There were questions as to whether the $200,000 Tierney's wife Patrice had received from her now-fugitive brother-in-law from his illegal gambling operations would have been reported as taxable income.

The Globe also reported that Tierney hired an attorney to go after the Globe relating to a story they planned to publish with experts saying the money would be taxable income, not a gift, since it was for services Patrice Tierney performed.

Tierney's opponent, Republican Richard Tisei, has issued a statement attacking Tierney for not releasing his tax returns yet.

"It's like Nixon's been reincarnated as a Congressman from the 6th Congressional district," Tisei said. "That era in American politics vanished long ago. The voters don't ask for perfection, but they do expect openness and honesty from their Congressman."

Tierney's office issued a statement challenging the Globe's story, saying the Globe left out vital information and statements.

"Congressman Tierney offered to provide the Globe with his tax returns this Thursday," Tierney spokesperson Kathryn Prael said in a statement after the Globe story was published. "These returns are available to members of the media who would like to review them."

Prael forwarded a letter that was sent to the Globe by U.S. Attorney D. Sean McMahon, former senior attorney with the Internal Revenue Service, who examined thetax returns and the case involving Patrice Tierney and concluded that the $200,000 was a gift, not taxable income.

"Your assertion that the payments to Patrice from family members were not gifts is incorrect," McMahon wrote to the Globe. "The test for determining the characterization of a transfer is highly fact-specific and focuses in material part on the transferor’s intent. One of the most significant facts considered in making that determination is whether the transfers were made between family members."

"Transfers between family members are legally presumed to be gifts," McMahon also asserts.

The rest of the letter is attached to this post in a pdf.

Prael also included a statement from Patrice Tierney's lawyer, Donald K. Stern:

"The US Attorney's Office, with the assistance of an IRS agent, conducted an intensive investigation of Patrice. She was never charged with anything related to her own finances or income tax. Indeed, the prosecutors and the Court recognized that there was no basis to even claim that there was any tax loss whatsoever to the IRS. Further, the federal judge stated in open court that Patrice "is not a tax evader." To now get some "tax experts" to offer hypothetical opinions based on incomplete and distorted facts is plainly unfair and unwarranted. Nothing Patrice Tierney said at her brother's trial, almost a year ago, had not already been said to the US attorney's office. Not only are there no further investigations, but there is no basis for such action."

Tierney and Tisei are set to debate tonight at North Shore Community College in Lynn.

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