Forgive me if years of sitting in on Ways and Means Committee hearings and pouring over Tax Notes intrudes, but if some county DSS employee just got a X-month interest-free loan for $33K, there might well be tax implications.

Usually the gift tax obligation falls on the donor, but in this case it is the tax-exempt county government doing the gifting. (One assumes.) It is also common tax law practice to require some market interest rate on cash advances above $10,000 to qualify as an actual arms-length loan as opposed to a gift. At a minimum it seems to me that someone owes the tax on the imputed value of the difference between a 30, 60 or 90 day — the county is unclear on the timeframe — loan for $33K with a market interest rate and an effective interest rate of zero on the same funds “repaid” to DSS by this unnamed employee.

Such a loan would be so hard to classify, I’m not going to hazard a guess what the interest rate might be. But it seems safe to save say that the rate would be at least 6% which would put the untaxed gift at several hundred dollars in value.

The one hitch in this is the notion that the repayment served as a pre-emptive restitution of sorts in place of some sort of criminal prosecution. Were that the case, the public needs much more disclosure regarding what has transpired these past few months. Bottomline, this thing is not over.