U.S. Treasury Pick Failed to Pay $34,000 in Taxes – Just Another Politician’s Honest Mistake?
President-elect Barack Obama called Timothy Geithner’s tax problems an “embarrassment,” but also referred to the situation as an “innocent mistake.” So don’t expect Geithner’s $34,000 tax bill to disqualify him from the new administration’s Treasury Secretary appointment.
According to reports, Geithner failed to pay self-employment taxes for money he earned from 2001 to 2004 while working for the International Monetary Fund.
News reports state that the amount that Geithner paid was $16,000 for the audit in 2006 and another $26,000 in a voluntary disclosure. (Voluntary disclosure can help mitigate legal problems later. The IRS offers leniency for voluntary disclosure and it is good advice for any American with IRS tax problems to take advantage of this policy).
It’s interesting to note that Geithner’s voluntary disclosure and payment occurred just days before he was nominated for Treasury Secretary. While the amounts owed and paid are not terribly large, the broader issue being raised by some senators is that this position oversees the IRS.
And what kind of a signal will this send to thousands of IRS employees as well as taxpayers?
The Associated Press reported:
It was the unpaid taxes, though, that were proving more damaging. Obama’s team says his mistake was a common one for people hired by international organizations and foreign embassies that don’t pay the employer share of Social Security taxes. The IRS estimated in 2006 that as many as half those employees had made tax-filing mistakes, and offered a group settlement to let them correct the errors.
But the Finance Committee, in 30 pages of documents released on Tuesday, noted that the IMF issues several clear guidelines each year for its employees detailing their responsibility to pay all their self-employment taxes, and that Geithner had signed annual statements saying that he would do so. He also had experience dealing with such taxes, the panel noted.
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Tags: geithner, Michael Rozbruch, tax expert, tax help, tax problems, Treasury secretary, Voluntary Disclosure
February 5th, 2009 at 10:11 am
[...] sending the wrong message to the American taxpaying public by apparently condoning the behavior of Tim Geitner and Tom Daschle.
March 3rd, 2009 at 10:04 am
[...] it was disclosed that treasury pick Tim Geithner owed $34,000 in back taxes and interest on income he made while working for the International [...]