EXCLUSIVE: IRS files $800,000 lien on '04 Kerry campaign

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By Jim McElhatton

EXCLUSIVE:

The Internal Revenue Service has filed a tax lien seeking more than $800,000 from Sen. John Kerry's 2004 presidential campaign, escalating a dispute over payroll taxes that the lawmaker's office blames on faulty government paperwork.

The episode has left a candidate who fell just a few percentage points short of winning the White House trying to convince the government's tax collector that his campaign already paid the taxes and doesn't owe any more.

The IRS filed the lien in the District of Columbia earlier this year, claiming that a previous attempt to collect the money was unsuccessful. "We have made a demand for payment of this liability, but it remains unpaid," the tax filing stated.

The IRS is taking action more than a year after the campaign closed its books and sent nearly $200,000 in leftover presidential campaign money to Mr. Kerry's Senate election fund.

Download a PDF of the IRS document here.

Mr. Kerry's office said the IRS claim is erroneous and that the campaign paid its taxes correctly in 2004 when the Massachusetts Democrat challenged President Bush and lost.

"The IRS merely has a gap in their electronic records of the 2004 campaign's payroll forms," Kerry spokeswoman Whitney Smith said of the lien. "We filed these forms correctly, and we're working with the IRS to provide them any and all needed information to set the record straight.

"There's no there there; nothing to see here so move along folks, end of story," she said.

IRS spokesman Anthony Burke declined to comment on the lien or on the Kerry aide's characterization of the tax issue, saying federal law bars IRS employees from discussing individual cases.