Nixon's Taxes: "A Shocker"

Another big bombshell is about to go off under the President. The Congressional Joint Committee on Internal Revenue Taxation, which Nixon asked to look into two questionable tax entries that he had made on his returns for 1969 and 1970, is expected to release its preliminary report late this week or next week. Says one senior Senator on the committee: "It will be a shocker."

Congressman Wilbur Mills, the influential and powerful chairman of the House Ways and Means Committee, added: "If Watergate brought pressure on Nixon to resign, our report will bring about a great deal more pressure. I don't believe that he will be able to withstand it." A congressional staff member said that Nixon may well wind up owing more than $500,000 in taxes and penalties. For the years 1970 and 1971 he paid less than $2,000 on a combined income of $526,000.

The tax committee will not draw any conclusions on whether Nixon may have been guilty of fraud in filing his returns. It will leave any such determination up to the Judiciary Committee and Internal Revenue Service, which is belatedly rechecking Nixon's returns. The report by the joint committee will merely indicate those deductions that it considers should not have been allowed and will cite other taxes that it judges the President owes. (Though the committee's findings are not binding, the President has promised to accept their ruling and pay accordingly.) It would be wrong to allege fraud, Mills explained, "because half the members of the committee are Senators, and they may have to serve as a jury on impeachment." In other words, Senators should not accuse Nixon if they also may have to stand in judgment of him later.

The committee is expected to conclude that Nixon owes some $300,000 in back taxes for having taken a deduction of $482,000 for the gift of his vice-presidential papers--a transaction that he has conceded may not have been completed before a law banning such deductions went into effect. While Nixon will not be accused of fraud because a deed and other papers completing the transaction apparently were backdated to get them within the deadline, the committee may put blame on those who prepared the returns. That could apply pressure on Nixon's lawyers to explain the transactions more fully in order to avoid criminal charges themselves.

-Also certain to be cited as another Nixon tax error was his failure to report a $142,000 profit on the sale of his Manhattan apartment in 1969 and to pay a capital gains tax on it. Nixon had asked the committee to examine both this sale and the deduction for his papers. The probers have gone beyond these matters and apparently have discovered other Nixon tax errors. Insists Mills: "People can better understand a failure to pay taxes than they can understand Watergate. Overdeductions, failure to state income--this will be a report to the American people. And they can draw their own conclusions." The conclusions may be particularly bitter because the report will be released just at the time when Americans are paying their own income taxes.

This file is automatically generated by a robot program, so viewer discretion is required.