Don't Mess With Taxes

When it was reported during last year's presidential campaign that Sarah Palin received tens of thousands of dollars in per diem from Alaska even though she was working from her Wasilla, Alaska, home, tax watchers were up in arms.

Their outrage at what they saw as the Alaska governor's flouting of federal tax law apparently was justified.

Today's Anchorage Daily News reports that the state's administration commissioner Annette Kreitzer has informed Palin that she must pay income taxes on the per diem amounts she received.

"At the Governor's request, we reviewed the situation to determine whether we were in full compliance with the pertinent Internal Revenue Service regulations," Kreitzer wrote in an e-mail to the Alaska newspaper. "As a result of the review, we determined that per diem needs to be treated as income, requiring a revision of W-2 forms for any affected employees."

Palin, who came to national prominence as Sen. John McCain's vice presidential nominee on the Republican ticket, had argued that the $150 per day claims were legitimate because she was away from her official "duty station" in the state capital of Juneau.

The per diem issue came to light last September, when the Washington Post reported that Palin had received $16,951 in per diem payments.

Palin's office would not comment on the amount of tax due, saying only that it "is a private matter."