Franken to pay $70K in back taxes in 17 states

Al Franken
DFL U.S. Senate candidate Al Franken. Franken is paying about $70,000 in back taxes in 17 states.
MPR Photo/Mark Zdechlik

Al Franken said he failed to pay a total of about $70,000 in income taxes, penalties and interest to 17 states in the years 2003, 2004, 2005 and 2006.

Franken insists the issue is not that he didn't pay taxes on his income. Instead he said he over paid taxes to his home states of New York first and then Minnesota. He said he failed to pay the appropriate taxes in the states where he earned money through his corporation.

"I think when people see the story and here the details behind it, they'll know it was an honest mistake," Franken said.

And its a mistake Franken said that his accountant made, not his wife or him. Franken insists he was never attempting to avoid paying the taxes.

"Franny and I paid state and federal taxes on every dime of income that we earned," Franken said. "And the only issue is what states we were supposed to pay it in."

Franken said he is paying what he owes plus interest and penalties in each of the 17 states, and he will seek tax refunds for the amounts he said he over paid in Minnesota and in New York.

Franken's revelation about the personal income tax problem comes several weeks after his private corporation paid more than $25,000 to the Workers Compensation Board of New York for failing to pay workers compensation premiums for several years.

More recently Franken discovered his business owed several thousands of dollars to the state of California in back corporate taxes. Like the personal tax problems he's now acknowledging, Franken insists the other problems resulted from nothing more than accounting errors due to bad professional advice.

Franken said he became aware of the personal tax issues following what he's calling a "scrubbing" of his books in the wake of the California corporate tax liability.

The tax problems that started with the unpaid workers compensation premiums came to light in early March and have been the subject of numerous news releases and press conference by the Minnesota Republican Party, which has accused Franken of lying about his business dealings.

In light of the most recent personal income tax news, Minnesota GOP Chairman Ron Carey once again questioned Franken's credibility.

"I think anybody who wants to aspire to be one of the top 100 leaders of this country, write the rules and the laws that we have to live by, when you have somebody of that stature who is not playing by the rules, that really draws into question your integrity and your character," Carey said.

Carey is predicting Minnesota voters will hold Franken accountable for his tax problems.

University of Minnesota political scientist Lawrence Jacobs said Republicans have Franken on the ropes.

"I imagine that the Coleman campaign is smiling," Jacobs said. "They obviously know a lot more about Al Franken than Al Franken."

Jacobs said the repeated nature of Franken's tax problems could damage his senate campaign.

"We elect people to the Senate and you expect them to follow the rules, they're after all making the rules and what this pattern suggests, and again it's not one event it's a number, a very consistent pattern," Jacobs said "It suggests that Al Franken has not followed the rules that Minnesotans and American follow every April 15th and all during the year."

Franken is hoping to win the DFL party endorsement to run against Republican Senator Norm Coleman.

Franken faces DFLer Jack Nelson-Pallmeyer in the race for that endorsement. Nelson-Pallmeyer declined to comment on Franken's tax problems.

Coleman was happy to discuss the latest development.

"These are troubling, the lack of (the) failure to take full responsibility is troubling, minimizing this is troubling and the people of Minnesota will then make a judgement as to whether there can be any trust or any credibility to whatever he says about this next."

Republicans want Franken to fully disclose his personal and business books. Franken says he'll consider releasing more information depending on what Coleman chooses to release.

Asked if he expected further revelations of tax and business accounting shortcomings, Franken responded this way.

"I'm very confident that this is it, but you never say never."

Franken is accusing Republicans of using his tax problems to draw attention away from Coleman's record in the Senate. He says Minnesotans want to talk about the issues like the economy, health care and the war in Iraq and he predicts Minnesotans will buy his explication that his tax liabilities are the result of an accounting errors not an effort to avoid paying his fair share.

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