Politics

SPRINGFIELD, Ill. (AP) ― When most people finish work, they drive home. Illinois Governor Rod Blagojevich flies to Chicago.

An Associated Press analysis found that Blagojevich has repeatedly used state aircraft to fly from Springfield to hometown Chicago when there appears to be no business reason for the trip.

Tax experts say the Internal Revenue Service could consider that travel a taxable fringe benefit.

But Blagojevich's office says the governor's main office is in Chicago -- not the state capital -- so trips there are for legitimate business.

The AP review found that the value of the flights by Blagojevich, his family and guests could be at least $225,000.

That could mean a potential tax bill to the governor of $60,000. Taxpayers could get hit with a penalty of $40,000 if he doesn't pay the bill.



Blagojevich could have significantly cut the amount he might owe for personal trips on state aircraft if he would have used a federal tax formula.

The Internal Revenue Service allows a steeply discounted rate for the value of executive's personal travel on company aircraft.

An Associated Press review of flights by Blagojevich, his family and guests shows trips with no business purpose valued at $225,000.

He could owe taxes of $60,000 on the flights.

His office says the issue is moot because the governor's main place of business is Chicago -- not the state capital -- so flights there are for business purposes.

If Blagojevich had used the IRS discount -- the flights would have a value of $15,000 or less.

He likely would still be able to use the discount for 2007 flights. That would save him tens of thousands of dollars.

The potential tax bill of $60,000 is based on Blagojevich applying the discount for 2007.

FAMILY FLIGHTS

Blagojevich's wife, Patricia, and the couple's two children have flown on state aircraft nearly 300 times. An Associated Press analysis found dozens of those trips could be personal, which Blagojevich's office disputes.

Private planes for the flights would have cost at least $36,000, which could be taxed as income to the governor.

But the Internal Revenue Service could declare dozens more as personal.

The AP analysis counted most of Patricia Blagojevich's flights as business-related, reasoning that taxpayers expect to see the first lady at some official events.

But the IRS is strict about spouses' travel and it's rare for the IRS to allow free flights for children. Combined, Amy and Annie Blagojevich took 190 flights listed as business-related -- many of which they wouldn't have been on if they lived in Springfield.

Nonetheless, the analysis of personal flights did not count dozens the children took to their father's inaugurals, state fairs, Springfield Easter egg hunts, Halloween parties, lighting Christmas trees, and even Thanksgiving dinner at the usually empty Executive Mansion.

PERSONAL GUESTS

Blagojevich and his campaign fund have accounts to reimburse the state for personal guests or passengers on political missions for him. But the reimbursements for more than 60 guests flying nearly 150 flights aren't as much as the cost of chartering a plane, so the IRS could tax the difference, experts said.

The IRS apportions the charter cost among passengers. The amount underpaid for Blagojevich's guests was $24,000, according to the analysis.

One guest, a friend of Blagojevich's older daughter Amy, took 18 flights that were underpaid, according to IRS rules, by $1,603.





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