CLINTON TAX RETURNS CHALLENGED IN SENATE WHITEWATER REPORT.

Byline: Stephen Labaton The New York Times

The Senate Whitewater Committee, in its final report, raises new questions about whether President Clinton and Hillary Rodham Clinton properly reported their tax liabilities from the Whitewater land venture to the Internal Revenue Service.

The report is to be made public Tuesday after it is filed with the full Senate by the Republicans who control the committee. In recent days, portions of the committee's report have been provided to The New York Times by people involved in the congressional investigation, including the analysis of the Clintons' taxes.

The analysis says that, ``The Clintons could have understated their income on Whitewater-related items by an additional $33,771'' beyond the amount of misreporting that they have acknowledged and corrected. But it also says that the committee could not resolve the issue definitively because its investigators were unable to obtain all the information needed to make such a determination.

David Kendall, the Clintons' personal lawyer, said that it was difficult to respond to a report that had not been made public, but that the claims ``sound far-fetched and wrong.''

``Over the years, the Clintons' tax returns have been professionally prepared by independent CPAs,'' Kendall said. ``They've been heavily scrutinized by a host of experts. The claims in the Special Committee's report are as wrong-headed and partisanly motivated as the claims made in a House banking committee report, released last summer.''

Last month, the White House issued its own report defending most of the Clintons' tax deductions involving Whitewater, including about two-thirds of those mentioned in the new Senate report. It also identified a few errors for which the Clintons paid $2,910 in back taxes and interest they owed from incorrect tax filings in the 1980s related to their Whitewater real estate investment.

Nonetheless, the Senate report concludes that the tax ``errors and questions'' on prior returns ``cannot be dismissed as mistakes by the Clintons' personal accountants.'' In particular it notes that an accountant testified that in at least one case many years ago, he raised concerns and was told by Clinton ``to back off and leave the issue alone.''

More recently, during the 1992 presidential campaign Hillary Clinton discussed with her accountant whether the Clintons had deducted the same interest payment on two separate returns in 1986 and 1987, according to the report, but the matter was not corrected until last month.

The Clintons' taxes have been an issue ever since Whitewater surfaced in 1992.