Henry Louis Gates' Tax Problem

In addition to getting arrested for disorderly conduct, Henry Louis Gates may have tax problems:

A foundation created and led by Henry Louis Gates Jr. is amending its federal tax form after questions were raised about $11,000 paid to foundation officers -- funds that the original tax form called research grants, but that should have been classified as compensation, ProPublica reported. When the payments are accounted for accurately, the foundation's administrative expenses will account for 40% of its spending in 2007, not 1% as originally reported to the IRS. Gates created the Inkwell Foundation with the goal of supporting work on African and African-American literature, history and culture, the article said. The report by ProPublica also noted that some of the actual grants went to people close to Gates. Gates told ProPublica that the foundation's second-largest grant, for $6,000, went to his fiancée, Angela DeLeon,. DeLeon was formerly on the foundation board and Gates said he recused himself from a vote on the grant. A grant of $500 went to Evelyn Higginbotham, chair of the foundation's board and chair of Harvard University's Department of African and African-American studies. Gates said she didn't vote on the grant. ProPublica is an organization that conducts investigative journalism. The article noted that Gates -- the Harvard scholar who is a leading figure in African-American studies whose arrest at his home has set off a national debate about the way black men are treated by law enforcement -- also serves on ProPublica's board.

I'd seen something about this before and it may not really be a scandal. I agree the grants were mis-reported - probably deliberately so though for what reason I can't fathom - and amending the returns now is the correct thing to do. I don't see this yet as some kind of personal benefit to Gates - his friends got small sums with the remainder of funds staying in bank accounts, though that was in 2007 so we don't know if the money is still there or what it was used for. There's no reason to suspect wrong-doing on the face of this but the mis-statement coming to light during the scandal about Gates' arrest only adds to fuel to the fire.

Via TaxProf Blog.