Geithner: Does tax error pass smell test?
Timothy Geithner, Obama's nominee as Treasury Secretary, has disclosed a couple of problems -- employing an undocumented housekeeper for a couple of years, and mistakenly not paying self-employment taxes on money he earned at the IMF.
The Obama camp is dismissing the matters as minor, but the tax matter may prove tricky.At least, it should take some of the focus off of Hillary's refusal to agree to better disclosure on donations to Bill's global charity.
Obama spokesman Robert Gibbs: “He’s dedicated his career to our country and served with
honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed.”
The IMF apparently pays employees as independent contractors, and doesn't take out payroll taxes. Geithner isn't the first to not realize he had to pay the payroll taxes himself. But here's the rub: He worked for the IMF from 2001 to 2004. He was audited by the IRS in 2006, and ordered to pay $14,847 in back taxes and $2383 in penalties for 2003 and 2004.
Even assuming that he didn't notice in the first place that payroll taxes weren't being deducted, that audit and assessment for 2003-04 should have alerted him that maybe he owed some taxes for 2001 and 2002 as well, right?
But he didn't pay them until Obama vetters discovered the problem. Then he paid $25,000 in back taxes and penalties a few days before the nomination was announced.
This, of course, is a nominee for Treasury secretary, who oversees the IRS. He's supposedly super-bright, but when told that he hadn't paid payroll taxes for 2003 and 2004, it didn't occur to him to look back at 2001 and 2002, when he was also working for the IMF?
Charlie Rangel, the House's chief tax writer, will no doubt be understanding. But does that scenario pass a smell test?
And: Why did Obama keep this secret until now? Why didn't he disclose that his Treasury nominee had skipped some taxes at the time he nominated him?
AP story after the jump. Obama administration talking points are here and Geithner records released by Senate Finance Committee are here.
AP STORY ON GEITHNER
WASHINGTON (AP) — President-elect Barack Obama’s choice to run
the Treasury Department and lead the economic rescue effort
disclosed to senators Tuesday that he failed to pay $34,000 in
taxes from 2001 to 2004, a last-minute complication in an otherwise
smooth path to confirmation.
Timothy Geithner paid most of the past-due taxes days before
Obama announced his nomination in November, an Obama transition
official said. The unpaid taxes were discovered by Obama’s
transition team while investigating Geithner’s background, the
official said.
The transition official requested anonymity because the source
was not authorized to discuss Geithner’s situation.
Obama reiterated his support Tuesday for Geithner as senators
who are considering the appointment quizzed Geithner behind closed
doors.
“He’s dedicated his career to our country and served with
honor, intelligence and distinction,” incoming White House
spokesman Robert Gibbs said. “That service should not be tarnished
by honest mistakes, which, upon learning of them, he quickly
addressed.”
Geithner failed to pay self-employment taxes for money he earned
while working for the International Monetary Fund from 2001 to
2003, the transition official said. In 2006, the IRS notified him
that he owed $14,847 in self-employment taxes and $2,383 in
penalties from 2003 and 2004.
Transition officials discovered last fall that Geithner also had
not paid the taxes in 2001 or 2002. He paid $25,970 in taxes and
interest for those years several days before Obama announced his
nomination, the transition official said.
Geithner also didn’t realize a housekeeper he paid in 2004 and
2005 did not have current employment documentation as an immigrant
for the final three months she worked for him, the transition
official said.
Geithner is the second Obama nominee to face controversy. New
Mexico Gov. Bill Richardson withdrew his name on Jan. 4 as Obama’s
Commerce secretary after questions surfaced about an ongoing
federal investigation.
E-mail
Facebook
Digg
Delicious
Comments (8)
I'd say something sure smells foul here.
No one can make me believe that this was a mistake. If it truly was, this man has no business being anywhere near the Treasury Department.
I'd say something sure smells foul here.
No one can make me believe that this was a mistake. If it truly was, this man has no business being anywhere near the Treasury Department.
Why isn't this tax cheat doing time? Obama: chang you can
believe in?
Nowadays, there is no such thing as an honest person in the poilitical world. I do believe in change and we should start cleaning up from the top. How can you not know that everything you earn is not taxable...And if you don't, an honest person will ask. Imagine if we have a million people like him who owed taxes and paid, that's a lot of money that can help a lot of people in need. Karma will get them one day.
Is it just by chance that so many of this country's ruling elite make so many "honest mistakes" when it comes to engaging in dubious business deals,failing to report offuthe-book income or paying their taxes on time? Or are they so just so plumb busy looking after the country's welfare that they simply don't have time to check over their returns (or hire someone to do it)? I think not and fear that what is at work here is an ingrained attitude of arrogance and tacit complicity -- something along the lines of "I'm the star college quarterback so I can be excused for cheating on my exams -- andn wink-wink, the coach won't say anything " The lame excuses of "I was too busy being a pu lic servant to notice," or "I didn't know about that rule," or "It was someone else's fault wouldn't fake a nine-year-old and yet they seem to dupe the American public time after time. And asking the Senate to confirm these borderline white-collar criminals is like Dutch Schultz giving a character reference for Al Capone.
i cant believe obamas nominees, lined up to accompany him into the white house for 2009?? ( read between
the lines).
time after time?
the allegations coming to light, are all true, considering the negitive effects being felt all around the globe now!
for now its lay the blame, point the finger, or pin the tail on the donkeys...
controversial issues should be fully investigated now, not ten to twenty years, later after ten to twenty years of collosal commercialised damage? risk management
should never be a question?
history is where we came from, history shouldnt have to
repeat itself, isnt that why we are all given choices?
this IS a globalised problem, so why cant we all agree
to NOT DISAGREE? these choices are available..,
i cant believe obamas nominees, lined up to accompany him into the white house for 2009?? ( read between
the lines).
time after time?
the allegations coming to light, are all true, considering the negitive effects being felt all around the globe now!
for now its lay the blame, point the finger, or pin the tail on the donkeys...
controversial issues should be fully investigated now, not ten to twenty years, later after ten to twenty years of collosal commercialised damage? risk management
should never be a question?
history is where we came from, history shouldnt have to
repeat itself, isnt that why we are all given choices?
this IS a globalised problem, so why cant we all agree
to NOT DISAGREE? these choices are available..,
After preparing tax returns for 29 years, I'm glad to see somebody "in charge" who realizes how confusing all those rules can be. The problem is probably with his preparer, and I hope that he WASN'T trying to file his own returns. This is the man to whom we will give all that TARP money, honey, so this really isn't funny at all. Release the GITMO terrorists to make us safer, no torture for terrorists, just for successful taxpayers, forgiveness of fraud, and elevation of failure--these are all very disturbing for our future. Anybody out there want to drive over those bridges to be built by the "long-term unemployed," as suggested by Reich?