By Daniel Trotta

NEW YORK (Reuters) - House Rep. Charles Rangel, chairman of the tax-writing Ways and Means Committee, failed to report $75,000 of income from a villa he owns in the Dominican Republic, his attorney said on Friday.

The Democratic congressman, who has represented New York City's Harlem district for 38 years, plans to file an amendment to his previous tax returns and likely has no federal tax liability on the investment, lawyer Lanny Davis said.

Rangel probably owes nothing to the federal government because of depreciation and foreign tax credit, but he may owe a few thousand dollars to the state of New York, Davis said, calling Rangel's omission an "honest error" that he only realized due to recent media reports.

Details about the three-bedroom, three-bathroom beachfront home were first reported in the New York Post on Sunday and again in The New York Times on Friday.

Davis declined to comment on whether the matter embarrassed the head of the committee that drafts federal tax laws.

Rangel said in a statement his accountant would review the matter and that he would follow any recommendations.

Rangel has owned the villa at the Punta Cana Resort and Club since 1988 and rents it for as much as $500 per night, the Times said, but he never reported the income on his federal or state tax returns. Davis stressed that all investors in the time-share resort pay expenses and draw income on the resort collectively.

Rangel paid $80,000 for the unit, with a down payment of $28,500, in 1988 and spent $23,000 on renovations in 2003, Davis said. Discounting the down payment, his profit from the property over 20 years was a few hundred dollars, or less than 1 percent, Davis said.

"That's some cash cow," Davis said, mocking a headline in the Post.

The resort sent twice-annual statements to Rangel that detailed the reduction in his debt on the property, Davis said. Those statements were received by Rangel's wife and not given to the accountant, the lawyer said.

Rangel's finances have been under scrutiny since July, when the Times reported that the lawmaker lived in multiple reduced-rent apartments provided under a plan to preserve affordable housing in New York City.

Rangel defended his right to maintain those below-market rentals, but agreed to give up an office that he used for campaign activities.

Rangel has asked for a congressional ethics inquiry on that matter and was considering requesting a similar review of his Dominican property, Davis said.