Vice President Dick Cheney appears to have benefitted from the Hurricane Katrina tax relief law for charitable donations unrelated to storm victims. So reports TaxProf Blog, citing information from Notre Dame law professor Michael Kirsh.
According to the VP's 2005 tax return, Cheney claimed $6.8 million in charitable deductions -- a whopping 77 percent of his annual gross income. That's well over the 50 percent limit that would have applied had it not been for the Katrina Emergency Tax Relief Act of 2005, which Congress passed unanimously and President Bush signed into law on Sept. 23, 2005.
The White House press release announcing Cheney's filing says the charitable contribution reflects the net proceeds from an independent administrator's exercise of the VP's Halliburton options. Apparently Cheney had decided in 2001 to donate the net proceeds from the exercised options to charity.
TaxProf Blog writes:
The press release seems to confirm, at least implicitly, the VP's efforts to take advantage of the Katrina legislation -- it mentions that the Cheneys wrote a personal check of $2.3 million to the administrator in December in order to 'maximize the charitable gifts in 2005.' Admittedly, I don't know anything about the transactions beyond the info in the press release, but my gut reaction is that the personal check was given in order to make sure the independent administrator had sufficient liquid assets to pay all of the promised charitable contributions before the 50% limit returned on 1/1/06.
Despite the importance of the Katrina legislation to the Cheneys' filing, it appears that none of the charitable contributions actually went to Katrina-related charities. The press release lists the three recipients, all designated in the original 2001 agreement: George Washington University Medical Faculty Associates Inc. for the benefit of the Cardiothoracic Institute, the University of Wyoming for the benefit of the University of Wyoming Foundation, and Capital Partners for Education for the benefit of low-income high school students in the D.C. area.
TaxProf Blog concludes:
While there's nothing inappropriate about that from a legal perspective, it does demonstrate how the legislation, which was sold to the public as providing relief to Katrina victims, provided significant tax benefits to the VP (and potentially other wealthy individuals) in situations that have nothing to do with Hurricane Katrina.