Tax Snafu May Prove Costly in Massachusetts Gubernatorial Bid

When Mitt Romney left his home state of Massachusetts in 1999 to take over the presidency of the troubled Salt Lake Organizing Committee for the 2002 Olympics, he had no idea that filing his tax returns during that time might affect his future career.

Although on the surface it appears that it was a temporary job, Democrats in Massachusetts are claiming that Mr. Romney was not a resident of their state for three of the past seven years while he was carrying out his duties in Utah - a claim that is bolstered by the fact that Mr. Romney filed taxes as a part-year resident of Utah in 1999 and a full-year resident of that state in 2000.

The significance of this claim goes to the heart of Mr. Romney's bid to be the next governor of Massachusetts. Should Democrats prevail and win their case, which is being considered this week by the Massachusetts Ballot Law Commission, Mr. Romney will be bumped from the ticket, ineligible to run for the governorship of the state he has called home for 30 years. State law holds that a person must be a resident of the state of Massachusetts for seven years immediately prior to the election in order to be a candidate for governor.

Mr. Romney has testified before the Commission that he never intended to make Utah his home and that he did not study the Massachusetts tax rules before signing and filing his tax returns. He said that he signed his name where his accountants from PricewaterhouseCoopers advised, and mailed the tax forms without examining them. Amended state tax returns for 1999 and 2000 have since been filed, showing Massachusetts as the state of residence. The Big Five firm has not offered any comment on the case. Mr. Romney's lawyers argued to the state commission, "PwC's preparation of a part-year/nonresident tax return on (Mr. Romney's) behalf was simply incorrect, and that error was corrected when it was discovered."

The Ballot Law Commission is required to make a ruling in this matter by Friday, June 28.

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