Will They Pay?

No question about Whitewater hit such a raw nerve at the White House as whether the Clintons might have underpaid their federal income taxes. Asked about it by TIME last month, presidential adviser Bruce Lindsey angrily brandished folders of documents (which he refused to show) that he insisted proved all the deductions they took related to Whitewater were legitimate.

But now, following a hint first dropped by Hillary Rodham Clinton in an interview with TIME, White House sources are beginning to acknowledge that, well, er, maybe there were some errors. Mrs. Clinton told columnist Mary McGrory that she and her husband may have taken at least one deduction that had already been claimed by a corporation, presumably Whitewater. The First Source, Bill Clinton, followed up by telling reporters that any underpayments "certainly were not intentional." Said he: "I don't think we owe any extra taxes, but I'm not sure yet. If we do owe, we'll make it good" by repaying the Treasury.

How much may be at stake? Robert Stone, a tax expert consulted by , has estimated the Clintons might have underpaid their income taxes by $11,000 in 1978-79-80 because they took deductions for interest on Whitewater-related loans to which they were not entitled. With interest and penalties, they would have to pay about $30,000 now to clear the debt. According to estimates prepared for by the accounting firm Grant Thornton, the First Couple's debt might come to $53,632 in an absolute worst case -- $13,744 in taxes, the rest in interest.

Accountants working for David Kendall, the Clintons' personal lawyer, may well conclude that the Clintons lost less on Whitewater than the $68,900 calculated in a 1992 report issued by Denver attorney James Lyons at the Clintons' request. Why did the Clintons embrace that figure if it was wrong? "I didn't have the records of the company," the First Lady told McGrory. But Susan McDougal, a partner in Whitewater, says she turned over all corporate documents to the Clintons. So how come Hillary Clinton could not find them? Stay tuned.