WASHINGTON— White House chief of staff Rahm Emanuel's Washington lodging arrangements, a rent-free basement room in a Capitol Hill home owned by Rep. Rosa DeLauro (D-Conn) and her pollster husband, have inspired debate among tax experts and in Republican-leaning parts of the blogosphere.

One issue is whether Emanuel, who served in the House with DeLauro until early January, should have listed the room either as a gift or as income on his congressional financial disclosure forms. Emanuel's disclosure filings contain no mention of his use of the room.

A murkier question is whether Emanuel has a tax liability for the arrangement. The matter may have particular sensitivity in the early days of an Obama administration in which at least four picks for high posts have had confirmations delayed or derailed by tax irregularities.

A further complexity involves DeLauro's husband, Stan Greenberg, an old friend of Emanuel's whose firm had done polling work for an Emanuel campaign committee and for the Democratic Congressional Campaign Committee, which Emanuel headed in 2005 and 2006.

Emanuel's rooming agreement with DeLauro and Greenberg is a twist on a familiar arrangement in the capital. Many lawmakers room together while in Washington, though in many cases they rent apartments and share costs.

Emanuel has stayed in the basement room of the home for free during House sessions for approximately five years, according to the Hartford Courant.

Neither Emanuel nor DeLauro could be reached for comment.

Emanuel's accommodations drew attention in early February when the gawker.com web site accused Emanuel of living in an illegal apartment in DeLauro's house.

DeLauro issued a statement batting down the story by asserting that "we have no separate apartment in our D.C. house, no rental apartment," and that bedrooms and living areas in the house "are often used by close family and friends."

Her statement also said the house had been inspected in November by Washington zoning officials pursuant to a complaint. The inspection was "uneventful and we did not hear again from the zoning office," she said.

Jan Baran, a Washington ethics lawyer who advises mostly Republicans, said Emanuel's use of the room from DeLauro and Greenberg does not violate House ethics rules since members clearly are allowed to give each other gifts of lodging.

Greenberg's co-ownership of the property doesn't affect DeLauro's ability to offer hospitality subject to House rules permitting the practice, Baran said. "It's indisputably her home," Baran said.

Tax experts are divided about whether Emanuel would have an IRS liability for the free room. The issue has aroused unusual online interest among tax experts, perhaps because arcane points of tax law rarely intersect with mainstream political events, said Paul Caron, an associate dean at the University of Cincinnati Law School and author of the TaxProf blog.

Caron said Greenberg's polling work for Emanuel and the DCCC muddies the argument that the room is a gift and thus either tax exempt or subject only to limited taxation.

"The courts have been very clear. It's very hard to claim something is a gift when you have a business context," said Caron.

Joseph Dodge, a professor at Florida State University College of Law, argued that the room is not subject to tax either as a gift or as income.

It's not a gift because it doesn't effectively cost DeLauro and Greenberg anything, Dodge said.

Nor would it be taxable as income to Emanuel because of the couple's motive in making the room available, "which would be friendship or generosity," Dodge said.

azajac@tribune.com

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