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Tim Miller, Executive Director America Rising PAC P.O.

Box 100088 Arlington, VA 22210 June 18, 2013 Hon. Peter Franchot, Comptroller State of Maryland 80 Calvert Street Annapolis, MD 21404-0466 Dear Comptroller Franchot: I am writing on behalf of America Rising PAC to respectfully request that you review the residency status of Rep. Ed Markey, a congressman from Massachusetts who lives in Chevy Chase, MD. It appears from a review of news accounts and Maryland law that Rep. Markey may in fact be a resident of Maryland for tax purposes and, thus, may owe Maryland taxes and should file a Maryland state tax return. The following information is offered to you to assist in your review. Rep. Markey Owns A Home In Maryland, And Never Owned Property In His Congressional District Until Many Years After He Purchased His Maryland Home Rep. Markey and his wife purchased their home in Chevy Chase in 1991.1 Their home is 3,412 square feet and is currently assessed for tax purposes at $1.3 million.2 According to Montgomery County property tax records, Rep. Markey listed his Chevy Chase home as his principal residence through 2001, but stopped listing his home as his principal residence after he purchased his parents house in Malden, MA.3 The 2001 purchase of his parents house following his fathers death was the first time Rep. Markey owned property in his congressional district.4 Rep. Markey bought the house for $150,000.5 The house is currently valued at $204,800, and Rep. Markey doesnt take advantage of a tax break for homes that are owner-occupied.6

Maryland Department Of Assessments And Taxation Website, www.maryland.gov, Accessed 5/7/13; Joe Battenfeld, Markey Ripped On Residency, The Boston Herald, 4/17/94 2 Maryland Department Of Assessments And Taxation Website, www.maryland.gov, Accessed 5/7/13 3 Shira Schoenberg, Malden or Maryland, The [Springfield, Mass.] Republican, 2/1/13 4 Ibid. 5 Malden Property Assessors Website, www.malden.patriotproperties.com, Accessed 5/8/13 6 Ibid.; Shira Schoenberg, Malden or Maryland, The [Springfield, Mass.] Republican, 2/1/13

Rep. Markeys Recent Actions Only Raise More Questions About His Residency Rep. Markey recently allowed reporters to review his tax returns, but redacted his address from the returns: The address Markey used on his federal and state taxes forms was redacted. [Spokesman Mark] Horan could not explain why, but insisted that the congressman used the address of his Malden home. Markey has come under fire for also spending much of his time at his upscale house in Chevy Chase, Md., a Washington, D.C. suburb. 7 Rep. Markey Likely Meets The Definition Of A Maryland Resident Based On The Amount Of Time He Spends There Earlier this year Rep. Markeys Senate campaign spokeswoman produced for a news reporter an exact number of trips -- 34 -- that Markey took back to his congressional district in 2012: Markey campaign spokeswoman Giselle Barry said the congressman took the equivalent of 34 round trips between Boston and Washington in 2012, including some paid for with personal and campaign funds. 8 If we were to assume that Rep. Markey spent five days out of Maryland on each of those 34 trips, there would remain 195 days in 2012 when Markey could have been residing in Maryland. According to Maryland law, one definition for a resident of Maryland is an individual maintaining a place of abode in the state for 183 days during a taxable year. The definition of resident is set forth in 10-101(k) of the Tax-General Article, Annotated Code of Maryland and Code of Maryland Regulations (COMAR) 03.04.02.01B. Briefly stated, an individual is a resident of Maryland if the individual is domiciled in Maryland on the last day of the taxable year or if the individual maintains a place of abode in Maryland for more than six months of the taxable year and is physically present in the State for 183 days or more during the taxable year. A day is defined to mean any part of a day, provided, however, that a continuous period of 24 hours or less may not constitute more than one day. 9 According to a publication released by your office, an individual may be considered a resident of Maryland for tax purposes as long as they have maintained a place of abode in the state for more than six months and have been physically present in the state for 183 or more days during a tax year. An individual may also be a resident of Maryland, even though not domiciled in this State, if the individual maintains a place of abode in this State for more than six months of the taxable year and is physically present for 183 days or more during the taxable year.4 The term maintaining a place of abode in this State for more than six months of the taxable year is not
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Stephanie Ebbert and Frank Phillips, Markeys Taxes Show Deductions, Social Security Income, The Boston Globe, 5/25/13 8 Noah Bierman and Frank Phillips, Brown Swipes at Markeys Residency, The Boston Globe, 1/3/13 9 Administrative Release No. 37, Comptroller of Maryland, www.marylandtaxes.com, 9/09

intended to include every person who owns property within this State. If a residence is used for the purpose of a vacation home or for the purpose of returning to Maryland to visit family and friends, then the individual cannot be considered a resident of this State unless they are physically present in the State for 183 days or more of the taxable year. 10 Even if an individual is not a Maryland domiciliary, they must file a Maryland tax return if they spend in the aggregate 183 days in Maryland: Question 7: I am not a Maryland domiciliary and was only in Maryland for a portion of the year. I have Maryland source income and I paid taxes to my state of domicile. Why do I need to file a Maryland tax return? Answer: Any individual who maintains a place of abode in Maryland and spends in the aggregate 183 days or more in Maryland is considered a resident for Maryland personal income tax purposes and must file a Maryland Resident Personal Income Tax Return.6 You may be eligible for a credit on your other states return for taxes paid to Maryland. 11 Even if an individual is not a Maryland domiciliary and spends less than 183 days in Maryland, they must file a Maryland nonresident tax return and pay tax on income from Maryland tangible sources, including from business carried on in Maryland: If an individual maintains a place of abode in Maryland and spends fewer than 183 days in Maryland, they are considered a nonresident and must file a Maryland Nonresident Personal Income Tax Return and pay tax on all income from Maryland tangible sources.12 Rep. Markey Likely Never Took Action To Sever Ties With Maryland When He Purchased A House In Massachusetts An individual is obligated to pay tax in Maryland if they are a resident of Maryland, even if they havent been in the state in the previous tax year, unless they establish a domicile elsewhere and sever ties with the state. Question 1: I have been a resident of Maryland for the last six (6) years; however, I was not in Maryland at any time during the last tax year. I did not benefit from any state or local privileges. I did not use the roads, schools, shops or anything here. Why do I have to pay tax here in Maryland? Answer: Unless it is your intent to sever ties with Maryland and establish a new domicile elsewhere and that intent is demonstrated by the actual establishment of a new domicile, you are still considered a Maryland resident. Therefore, you are obligated to pay tax to Maryland. 13 According to Maryland legal precedent, in order to effect a change of domicile, an individual must move to another habitation and remain there permanently or for an unlimited amount of time and retains their domicile unless they acquire one elsewhere:

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Ibid. Ibid. 12 Ibid. 13 Ibid.

This principal of law is deep-rooted as indicated by the Maryland Court of Appeals case, Shenton v. Abbott, 178 Md. 526, 530 (1940). Therein, the Court stated: It is a fundamental rule that, in order to effect a change of domicile, there must be an actual removal to another habitation, coupled with an intention of remaining there permanently or at least for an unlimited time. But a change of residence, to enable a person to perform the duties of a civil office, whether elective or appointive, does not of itself constitute a change of domicile. No temporary residence, whether for the purposes of business, health, or pleasure, occasions a change of domicile. Even though a person may be absent from his domicile for many years, and may return only at long intervals, nevertheless he retains his domicile if he does not acquire a domicile elsewhere. 14 A domicile has been defined in Maryland appellate courts as a permanent home to which an individual has the intention of returning whenever absent. Domicile is not defined by statute, but has been defined by the appellate courts of this State to mean that place where a man [or woman] has his [or her] true, fixed, permanent home, habitation and principal establishment, without any present intention of removing therefrom, and to which place he [or she] has, whenever ... absent, the intention of returning.2 The courts have also held that once domicile is established, it continues until superseded by a new domicile. 15 Rep. Markey claimed for a long time, even after he was married and before he purchased his parents house in Massachusetts, that his childhood bedroom was his residence, although were aware his source of income has for many years been in the District of Columbia, not far from his Maryland home: The pollster noted that Markey, who long claimed residency in his childhood bedroom at his parents Malden house, spends the bulk of his time living with his wife in a house in Chevy Chase, Md., a Washington suburb. 16 In a 1994 interview, several years after marrying and purchasing a large home in Chevy Chase, Rep. Markey described his parents house as the place where he would stay whenever he would travel back to his congressional district. This living arrangement doesnt sound like a fixed, permanent home, as described by Maryland courts, like his Chevy Chase home: 'I live with my family, in the same house I've lived in since 1948,' Markey said. 'That is where I stay every time I go to my district. Any suggestion that I'd somehow represent the district better if I didn't live with my family is ridiculous.' Markey, however, is the only member of the Massachusetts congressional delegation who doesn't own or rent property in his district. 17

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Ibid. Ibid. 16 Glen Johnson, Poll Focus Suggests Edward Markey Has More Than Passing Interest In Senate Special Election, The Boston Globes Political Intelligence, 12/18/12 17 Joe Battenfeld, Markey Ripped On Residency, The Boston Herald, 4/17/94

Even after purchasing his parents house, Rep. Markey has continued to live in his Chevy Chase home, thus neglecting to sever ties with Maryland. As youll read, in the intervening years Rep. Markey has actually strengthened his ties to Maryland. Rep. Markeys Intent Appears To Be To Live In Maryland Maryland authorities consider an individuals intent when determining what is their domicile, including the individuals physical presence and actions to establish a new domicile: Domicile is a question of intent. It is established by the individual intending to treat a place as the persons true, fixed, and permanent home. However, an individuals mere intent to treat a place as the persons domicile is not enough. Intent must be supported by action. An individual must take specific actions to change the persons domicile. The individual must be physically present in the new domicile and must establish ties that create the new domicile, while severing ties with the old domicile. 18 Maryland authorities consider what other residences are owned by the taxpayer, where they are located, and their size and value: 1. Home[,] a. What residences are owned or rented by the taxpayer[,] b. Where are the residences located[,] c. What is the size and value of each residence[.]19 As previously mentioned, Rep. Markey and his wife own a 3,412 square foot, $1.3 million home in Chevy Chase, compared to the $204,800 house they own in Malden, MA.20 Also, Rep. Markey does not take advantage of a tax break on the house he owns in Massachusetts that is intended for homes that are owner-occupied.21 Based on this comparison, it appears that Rep. Markey intends to live in Maryland. Rep. Markey Is Active In His Maryland Community Community involvement and social ties are another consideration in determining if an individual is a resident of Maryland for tax purposes. 5. Family connections[,] a. Where does the remainder of the taxpayers family live[,] b. Where do the minor children attend school[,] c. Where are the taxpayers social, community and religious ties[.]22 Rep. Markey appears to be active in his Maryland local community. Rep. Markey is a frequent fixture at Washington parties. Politico, an inside-the-Beltway publication, included him on a list of the Top 50 Party Animals in Washington:

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Administrative Release No. 37, Comptroller of Maryland, www.marylandtaxes.com, 9/09 Administrative Release No. 37, Comptroller of Maryland, www.marylandtaxes.com, 9/09 20 Malden Property Assessors Website, www.malden.patriotproperties.com, Accessed 5/8/13; Maryland Department Of Assessments And Taxation Website, www.maryland.gov, Accessed 5/7/13 21 Shira Schoenberg, Malden or Maryland, The [Springfield, Mass.] Republican, 2/1/13 22 Administrative Release No. 37, Comptroller of Maryland, www.marylandtaxes.com, 9/09

On account of his towering height, this cheery congressman and die-hard Boston Red Sox fan is easy to spot at the political fundraisers and book parties he attends. Rep. Ed Markeys presence is also typically marked by a crowd of admirers heading his way; hes a champion fighter on energy and green issues. His wife, Dr. Susan Blumenthal, served as an assistant surgeon general of the United States and as a White House health issue adviser. Ed is not a party person, his wife once told POLITICO. Sorry, but we have to disagree. 23 Rep. Markey and his wife took an interest in the fate of a blue spruce tree at their Chevy Chase home. They were concerned the tree would be harmed by construction on their neighbors property: The battle of words began after construction on the lot next to the Markeys started. Their neighbors, Ilene Chaite and her husband, had big plans, including tearing down an existing house and building a new one, digging a pool and taking down a retaining wall that lined the Markeys property. According to the source, the Markeys were concerned that their prized blue spruce tree, whose roots have grown onto the neighbors property, would be harmed in the work. 24 Rep. Markeys wife hired an arborist to devise a plan to save the tree: After a couple of terse exchanges with the contractor, the Congressmans wife hired an arborist from Davey Tree Expert Co., the same company that has a subcontract with the Architect of the Capitol to work on preserving trees during Capitol Visitor Center construction, to do a report on how to save the tree. 25 Rep. Markeys Wife Owns A Maryland Business Rep. Markeys wife, Susan Blumenthal, owns Global Health Institute, LLC, a business located in Chevy Chase, MD.26 Whether or not an individual is actively involved in business in the state is a factor in determining if they are a resident of Maryland for tax purposes. Maryland authorities consider if the taxpayer owns a business or what business interests they may have outside of the state. 4. Active business involvement[,] a. How does the taxpayer earn a living[,] b. Is the taxpayer actively involved in any business ownerships or professions[,] c. To what degree is the taxpayer involved in business ownerships[,] d. How does this compare to business interests outside of the State[.]27 Conclusion We hope you find the information contained here helpful in your investigation. Please let us know if there is anything we can do to further assist you.

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Anne Schroeder Mullins and Patrick Gavin, Top 50 Party Animals, Politico, 9/9/09 Ibid. 25 Ibid. 26 Global Health Institute, LLC, Department ID #: W11685039, Maryland Department Of Assessments And Taxation, www.dat.state.md.us, Accessed 5/20/13 27 Administrative Release No. 37, Comptroller of Maryland, www.marylandtaxes.com, 9/09

Sincerely,

Tim Miller Executive Director America Rising PAC cc: Hon. Martin J. OMalley, Governor