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Sarah Palin Owes Taxes on Per Diem Expenses

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Associated Press: Gov. Sarah Palin must pay back taxes on nearly $18,000 in expenses she charged the state for living in her home outside Anchorage instead of at the state capital, officials said Wednesday.

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A review of state policy and Internal Revenue Service tax laws determined the per diem payments should be treated as income, Department of Administration Commissioner Annette Kreitzer said.

The charges came to light after Palin was named John McCain's running mate on the Republican presidential ticket in August and became a campaign issue after she was presented to the nation as a fiscal conservative.

"These issues were raised during the national campaign and as result of the national campaign the governor asked us to look into this," Kreitzer said.

Palin had collected nearly $17,000 in per diem payments before she was named to the Republican ticket. The expenses were paid for more than 300 nights she slept at her home in the Anchorage suburb of Wasilla and commuted 40 miles to her Anchorage office instead of living in the governor's mansion in Juneau, the state capital. The practice started up again shortly after last fall's general election.

Juneau, in the Alaska Panhandle 600 miles from Wasilla, is only accessible by airplane or ship.

Palin's spokesman, Bill McAllister, said Wednesday he didn't know if Palin was still collecting per diem or if she would continue to do so.

McAllister said her taxes are a personal matter and wouldn't disclose how much she owes. However, he said Palin would pay the amount required.

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