US Representative John F. Tierney released six years of tax returns to several news organizations on Wednesday, revealing that he and his wife, Patrice, reported annual adjusted gross income averaging $180,957 and paid federal income taxes averaging $26,561.
The Tierneys’ returns were straightforward and appeared to contain no unusual deductions or income. The great majority of their income came from Tierney’s congressional salary, currently $174,000 a year, the returns show.
The eight-term Salem Democrat issued the returns on the eve of his first debate with his Republican challenger, Richard R. Tisei, a former state senator and onetime candidate for lieutenant governor who is giving Tierney what appears to be the congressman’s most competitive race since winning the seat in 1996.
Tisei had already provided the Globe with 10 years of his tax returns, which showed that he did not pay any federal income taxes in 2006 or 2008, due to losses he suffered from a Lynnfield real estate brokerage, which he owns with his life partner, and from two rental properties.
Tierney shared his returns after resisting requests from the Globe for more than two weeks amid questions about $223,000 that prosecutors say that his wife received from a brother’s illegal gambling business in Antigua.
The returns Tierney released do not reflect those funds, which the Tierneys have described as a gift from a relative that is therefore exempt from congressional public disclosure reporting requirements or taxation.
James P. Angelini, a professor of taxation at Suffolk University’s Sawyer Business School and the director of the master of science taxation program, reviewed Tierney’s returns for the Globe on Wednesday night. While cautioning that a complete analysis could be not be made without more time, Angelini said he found nothing unusual.
“I do not see anything that is glaringly in error or especially curious,” he said.
Tierney initially said he would release his tax returns during a July 3 news conference held to answer questions about the gambling business run by a brother-in-law, Robert Eremian, who has been charged with more than 400 counts of conspiracy and illegal gambling. He remains a fugitive, living in the Caribbean island nation.
Already a central issue in the campaign — Eremian’s gambling business has been the focus of negative TV ads — questions about the gambling business are likely to arise during the debate scheduled for 3 p.m. Thursday at North Shore Community College in Lynn.
In 2010, Patrice Tierney pleaded guilty to “willful blindness” in helping Robert Eremian file false tax returns. She served a month in federal prison and is serving two years of probation. Tierney has said he believed that the money his wife received came from money that Robert Eremian earned legally.
John and Patrice Tierney have said the money she received through a joint bank account that she managed for Robert Eremian was a gift from a relative and not income. But while testifying in the federal trial of a second brother, Daniel Eremian, Patrice Tierney said that she performed services for the money, a declaration that led tax specialists consulted by the Globe to say that the money could be considered taxable income. Daniel Eremian was convicted on illegal gambling charges and is serving a three-year prison term.
Patrice Tierney received much of the $223,000 through monthly $1,000 checks that she wrote to herself from the joint bank account. She also received additional money in the form of $1,000 monthly checks that she wrote to her mother, which her mother signed back over to her.
D. Sean McMahon, a former IRS attorney, reviewed the matter for the Tierney campaign, concluding that any suggestion that the money should have been reported as income “is without merit based upon the facts.” McMahon said that because the money was given by a relative, and because there were no known negotiations concerning salary, the money should not be considered income.
The Tierneys’ returns also show that the couple reported an average of $7,447 a year in dividend income, mostly from investment funds; $619 a year in interest, mostly from bank accounts; nearly $12,000 a year in net income from a piece of commercial real estate in Salem; and less than $2,000 a year in capital gains from securities and investments funds.
According to the returns, Patrice Tierney lost an average of $1,800 a year from 2006 to 2010 while she was running her own jewelry design business. In 2011, she earned $8,000 from a part-time job she holds as an event planner and administrative assistant at Salem’s Hawthorne Hotel, according to Tierney’s congressional public disclosure form.
Tisei’s returns show that in 2006 he earned $66,312, most of which came from his state Senate salary. But he also reported losses of $73,633 associated with a real estate firm that he owns with his life partner, Bernard F. Starr, as well as two rental properties.
The next year, in 2007, Tisei’s reported adjusted gross income of $156,382, thanks largely to more than $70,000 in profits from his share of the real estate brokerage. But in 2008, after the economy collapsed, Tisei was back on his heels after reporting losses from his combined real estate interests approaching $100,000.
During the July 3 press conference, Tierney promised to release his returns and said he had done it for every election. The Globe could find no evidence that he had ever previously released his returns.
But Wednesday night, Tierney campaign manager Matt Robison said Tierney has aired his tax records “on the two or three occasions when he’s been asked for them,” although no news stories were written about the releases and the campaign no longer has records that would document the releases. Tierney made no comment on the content of his returns Wednesday.Michael Rezendes can be reached at email@example.com. Follow him on Twitter @RezGlobe. Brian C. Mooney can be reached at firstname.lastname@example.org.