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The Honolulu Advertiser
Posted on: Wednesday, October 26, 2005

Maryland tax credit mistakenly given to Inouye

By Nancy Trejos
Washington Post

WASHINGTON — Sen. Daniel K. Inouye and two other members of Congress have been notified that they mistakenly received property tax credits on their Montgomery County, Md., homes, part of an inquiry into whether thousands of county residents benefited from flawed tax records.

Maryland officials sent letters to Inouye, D-Hawai'i, Sen. Ron Wyden, D-Ore., and Rep. Rick Larsen, D-Wash., last week, informing them they no longer would receive homestead tax credits because their Montgomery homes are not their principal residences, officials said.

The credits totaled about $2,000 combined for the three lawmakers, who all said they had no idea they had received the deduction by mistake.

"If the state has determined we have to pay more, we'll pay more for the public schools that my son goes to and the roads my wife drives on every day," Larsen said.

The errors were discovered by Olney, Md., resident Louis Wilen, an information technology worker who has spent about a year studying the county's tax records.

This year, Wilen noticed about $400,000 in erroneous credits to 2,000 owners of rental properties that were miscoded as their principal residences. Owners must live in their houses for at least six months of the year to receive the deduction.

Recently, Wilen began randomly picking members of Congress and checking their tax bills. Although Inouye, Wyden and Larsen live in their houses for most of the tax year, Wilen found they did not meet the other state criteria for principal residency: They do not vote, have driver's licenses or file income taxes in Maryland.

The homestead credit is granted when a homeowner with a rising assessment faces an annual property-tax increase exceeding 10 percent in Montgomery.