Whitewater Controversy - Tax Returns

Tax Returns

In March 1992, during his presidential campaign, the Clintons acknowledged that on their 1984 and 1985 tax returns, they had claimed improper tax deductions for interest payments made by the Whitewater Development Company and not them personally. Due to the age of mistake, the Clintons were not obligated to make good the error, but Bill Clinton announced that they would nonetheless do so.

Deputy White House counsel Vince Foster looked into this matter, but did not take any action before his death. Almost two years from the original announcement passed before, on December 28, 1993, the Clintons did make this reimbursement payment, for $4,900, to the Internal Revenue Service. This was done just before Justice Department investigators started seeking the Clintons' Whitewater files. The payment was made without filing an amended return (possibly because the three-year period for amended return filing had passed), but did include full interest on the amount in error, including the additional two-year delay. The Whitewater files in question, publicly released in August 1995, cast some doubt on the Clintons' assertions in the matter, as they showed that the couple were aware that the interest payments in question were by the Whitewater corporation and not them personally.