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Alaska reviewing per diem payments to Palin
(Agencies)
Updated: 2008-10-08 10:51

The IRS likely also will want details about $43,490 the state paid Palin over 20 months for family travel, including commercial airline tickets the state bought for some of her children to join the governor. Bingham said taxpayers must show a specific business purpose for the state reimbursement, some actual work or duty performed for the expense.

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"I guess I'm surprised that the state is paying for the kids. I don't know what the state business purpose is here," Bingham said.

Palin's returns showed that she and her husband underpaid their estimated taxes with an April extension and likely will owe interest. The per diem payments and family travel expenses were not included as income in those returns.

During the two tax years for which Palin released her returns, she claimed four dependent children. She gave birth this year to a fifth child. The family travel was a legitimate paid expense because Palin's husband and children represented the state at events, said Maria Comella, a campaign spokeswoman.

"The only time the children's travel was reimbursed was when they were traveling as part of an official event," she said.

Olsen, who worked in the Reagan administration's Department of Justice's tax division as an assistant attorney general, noted in his review of Palin's tax returns that her per diem payments were handled correctly by state officials as non-taxable because the governor's place of business was considered to be Juneau.

"No special consideration was ever given to Governor Palin, notwithstanding that she was the governor of Alaska," Olsen wrote.

Olsen said state law allows the governor's relatives to receive payment for travel costs "when conducting official state business." But his review did not address what state business was performed by Palin's children.

"Such payments for family members traveling on state business would not properly be included as taxable income on Governor Palin's federal tax returns," Olsen wrote.

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