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A Tax Cheat in charge of the IRS?
Geithner Backed by Obama, Lawmakers After Queries
Jan. 13 (Bloomberg) -- Treasury Secretary-designate Timothy Geithner won Senate Finance Committee Chairman Max Baucus’s support after answering questions about almost $50,000 in back taxes and interest he owed to the Internal Revenue Service.
“We need a Treasury secretary quickly given the dire economic straits we’re in,” Baucus said after the panel held an emergency meeting today to discuss the issue. The committee set Geithner’s confirmation hearing for Jan. 16.
President-elect Barack Obama nominated Geithner to take over the Treasury Department as the government grapples with the worst financial crisis in decades and an economy mired in recession. The Treasury oversees the IRS, the country’s tax-collecting agency.
“We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country,” Obama spokesman Robert Gibbs said in a statement.
At issue is Geithner’s failure to pay self-employment taxes while working at the International Monetary Fund. In addition, questions were raised about a lapse of his housekeeper’s legal status. Geithner said he was unaware that the woman’s immigration papers had expired three months before she stopped working for him, according to an official on Obama’s transition staff. The Finance Committee said taxes for the housekeeper were “appropriately paid.”
Hatch’s Support
Republican Senator Orrin Hatch and Democratic Senator Debbie Stabenow, both committee members, said they were satisfied with Geithner’s answers to their questions during the private meeting in Baucus’s office.
“I support him,” Hatch said. Stabenow said Geithner addressed the issues “forthrightly” during the meeting.
Geithner, 47, paid all his income taxes as an IMF employee but made what the transition official called a common mistake on his tax returns with regard to self-employment taxes.
According the Finance Committee, Geithner had to pay the IRS a total of $48,268 in taxes and interest.
He resolved part of the underpayments -- $16,732 with interest -- after an IRS audit in 2006 of his returns for 2003 and 2004. Another $25,970 was discovered as the Obama transition team vetted him for Treasury secretary, according to the panel. The Finance Committee staff discovered an additional $5,566 in taxes and interest that Geithner owed. He recently amended his returns for 2001, 2002, 2004, 2005 and 2006, the committee said in a memorandum released to the media.
Overnight Camp
Among the mistakes the committee staff identified were Geithner’s decision to classify the cost of sleep-away camps as “dependent care” in 2001, 2004 and 2005. An accountant who prepared his 2006 tax return warned Geithner that the expense wasn’t allowable “but he did not file amended returns at the time to correct the prior years,” the Finance Committee said.
Geithner’s service to the country “should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed,” Gibbs said.
Senator Chuck Schumer, a New York Democrat, said he doesn’t think the errors are enough to disqualify Geithner. “Many of my colleagues on both sides of the aisle agree with that,” he said.
The ranking Republican on the committee, Charles Grassley of Iowa, didn’t respond to reporters’ questions when leaving the meeting. Republican Senators John Ensign of Nevada, Jon Kyl of Arizona and Olympia Snowe of Maine declined to comment.
Won’t be Derailed
Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters he was “not concerned at all” about the matter. He called Geithner, currently the president of the Federal Reserve Bank of New York, “extremely well qualified.”
Stan Collender, a former House and Senate Budget Committee analyst, said Geithner’s nomination isn’t likely to be derailed by the tax and housekeeper revelations, especially in the Democratic-controlled Congress.
“It’s like a parking ticket,” Collender said. “I can’t imagine in the current environment it would be much of a problem.”
There is ample precedent for immigration roadblocks in the Cabinet appointment process. President George W. Bush’s choice for labor secretary, Linda Chavez, withdrew her nomination in 2001 after she was criticized for providing lodging and money for an illegal immigrant a decade earlier.
Former New York City Police Commissioner Bernard Kerik pulled his name from consideration for secretary of Homeland Security in 2004, citing a failure to file taxes and other legal papers for an immigrant he employed as a housekeeper and nanny.
Zoe Baird
Bush’s predecessor, Bill Clinton, stumbled when he named Zoe Baird to the post of attorney general. Baird withdrew from consideration in 1993 because of revelations that she employed illegal immigrants as domestic workers without paying the required Social Security taxes. Clinton’s second choice, Kimba Wood, stepped aside weeks later after administration officials learned she had employed an illegal alien as a babysitter.
“I do think there’s a double standard there,” Chavez said in a telephone interview today. “That’s politics, and the Democrats are in control and apparently they are much more willing to forgive somebody who may not have lived up to the letter and spirit of the law.”
Chavez, now chairman of the Center for Equal Opportunity in Falls Church, Virginia, also said “people tend to react very negatively if the immigration issue is raised.”
Still, Chavez said the issue for Geithner isn’t major. “It frankly doesn’t bother me all that much that he had this problem,” she said.
Jan. 13 (Bloomberg) -- Treasury Secretary-designate Timothy Geithner won Senate Finance Committee Chairman Max Baucus’s support after answering questions about almost $50,000 in back taxes and interest he owed to the Internal Revenue Service.
“We need a Treasury secretary quickly given the dire economic straits we’re in,” Baucus said after the panel held an emergency meeting today to discuss the issue. The committee set Geithner’s confirmation hearing for Jan. 16.
President-elect Barack Obama nominated Geithner to take over the Treasury Department as the government grapples with the worst financial crisis in decades and an economy mired in recession. The Treasury oversees the IRS, the country’s tax-collecting agency.
“We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country,” Obama spokesman Robert Gibbs said in a statement.
At issue is Geithner’s failure to pay self-employment taxes while working at the International Monetary Fund. In addition, questions were raised about a lapse of his housekeeper’s legal status. Geithner said he was unaware that the woman’s immigration papers had expired three months before she stopped working for him, according to an official on Obama’s transition staff. The Finance Committee said taxes for the housekeeper were “appropriately paid.”
Hatch’s Support
Republican Senator Orrin Hatch and Democratic Senator Debbie Stabenow, both committee members, said they were satisfied with Geithner’s answers to their questions during the private meeting in Baucus’s office.
“I support him,” Hatch said. Stabenow said Geithner addressed the issues “forthrightly” during the meeting.
Geithner, 47, paid all his income taxes as an IMF employee but made what the transition official called a common mistake on his tax returns with regard to self-employment taxes.
According the Finance Committee, Geithner had to pay the IRS a total of $48,268 in taxes and interest.
He resolved part of the underpayments -- $16,732 with interest -- after an IRS audit in 2006 of his returns for 2003 and 2004. Another $25,970 was discovered as the Obama transition team vetted him for Treasury secretary, according to the panel. The Finance Committee staff discovered an additional $5,566 in taxes and interest that Geithner owed. He recently amended his returns for 2001, 2002, 2004, 2005 and 2006, the committee said in a memorandum released to the media.
Overnight Camp
Among the mistakes the committee staff identified were Geithner’s decision to classify the cost of sleep-away camps as “dependent care” in 2001, 2004 and 2005. An accountant who prepared his 2006 tax return warned Geithner that the expense wasn’t allowable “but he did not file amended returns at the time to correct the prior years,” the Finance Committee said.
Geithner’s service to the country “should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed,” Gibbs said.
Senator Chuck Schumer, a New York Democrat, said he doesn’t think the errors are enough to disqualify Geithner. “Many of my colleagues on both sides of the aisle agree with that,” he said.
The ranking Republican on the committee, Charles Grassley of Iowa, didn’t respond to reporters’ questions when leaving the meeting. Republican Senators John Ensign of Nevada, Jon Kyl of Arizona and Olympia Snowe of Maine declined to comment.
Won’t be Derailed
Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters he was “not concerned at all” about the matter. He called Geithner, currently the president of the Federal Reserve Bank of New York, “extremely well qualified.”
Stan Collender, a former House and Senate Budget Committee analyst, said Geithner’s nomination isn’t likely to be derailed by the tax and housekeeper revelations, especially in the Democratic-controlled Congress.
“It’s like a parking ticket,” Collender said. “I can’t imagine in the current environment it would be much of a problem.”
There is ample precedent for immigration roadblocks in the Cabinet appointment process. President George W. Bush’s choice for labor secretary, Linda Chavez, withdrew her nomination in 2001 after she was criticized for providing lodging and money for an illegal immigrant a decade earlier.
Former New York City Police Commissioner Bernard Kerik pulled his name from consideration for secretary of Homeland Security in 2004, citing a failure to file taxes and other legal papers for an immigrant he employed as a housekeeper and nanny.
Zoe Baird
Bush’s predecessor, Bill Clinton, stumbled when he named Zoe Baird to the post of attorney general. Baird withdrew from consideration in 1993 because of revelations that she employed illegal immigrants as domestic workers without paying the required Social Security taxes. Clinton’s second choice, Kimba Wood, stepped aside weeks later after administration officials learned she had employed an illegal alien as a babysitter.
“I do think there’s a double standard there,” Chavez said in a telephone interview today. “That’s politics, and the Democrats are in control and apparently they are much more willing to forgive somebody who may not have lived up to the letter and spirit of the law.”
Chavez, now chairman of the Center for Equal Opportunity in Falls Church, Virginia, also said “people tend to react very negatively if the immigration issue is raised.”
Still, Chavez said the issue for Geithner isn’t major. “It frankly doesn’t bother me all that much that he had this problem,” she said.
ACK!
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