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Tax Troubles For Obama's Treasury Pick

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Post  Cincy Fan 44 Tue Jan 13, 2009 10:13 pm

http://news.yahoo.com/s/ap/20090113/ap_on_go_ca_st_pe/treasury_nominee

WASHINGTON President-elect Barack Obama's choice to run the Treasury Department and lead the nation's economic rescue disclosed publicly Tuesday that he failed to pay $34,000 in taxes from 2001 to 2004, a last-minute complication that Senate Democrats tried to brush aside as a minor bump on an otherwise smooth path to confirmation.

Timothy Geithner paid most of the past-due taxes days before Obama announced his choice in November, according to materials released by the Senate Finance Committee. He had paid the remainder of the taxes in 2006, after the IRS sent him a bill.

The still-unpaid taxes were discovered by Obama's transition team while investigating Geithner's background. Obama's staff told senators about the tax issues Dec. 5.

Finance Committee Chairman Max Baucus said he still hoped Geithner could be confirmed on Inauguration Day.

"These errors were not intentional; they were honest mistakes," Baucus said after he and other committee members met with Geithner behind closed doors on Tuesday.

Republican senators, who might be expected to raise the most significant objections, did not immediately comment.

After senators met with Geithner, the panel released 30 pages of documents detailing his tax errors and also how he came to employ a housekeeper whose legal immigrant work status had briefly lapsed in 2005.

Senate Majority Leader Harry Reid dismissed the events as "a few little hiccups," and said he was "not concerned at all" about the impact.

Obama reiterated his support.

"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, plucked from his job as president of the Federal Reserve Bank of New York to serve as Obama's treasury secretary, told transition officials and senators that he didn't know he owed self-employment taxes when he worked for the International Monetary Fund.

He failed to pay self-employment taxes for money he earned while working for IMF from 2001 to 2003, according to materials released by the Senate committee. In 2006, the IRS notified him that he owed $14,847 in self-employment taxes and $2,383 in interest from 2003 and 2004, which he paid after an audit. The IRS waived penalties for those tax years.

Transition officials discovered last fall that Geithner also had not paid the taxes in 2001 or 2002. He paid $25,970 in back taxes and interest for those years several days before Obama announced his choice, the committee documents showed.

Geithner and his supporters have said his mistake was a common one for people hired by international organizations that don't pay the employer share of Social Security taxes. Geithner told Obama's team and senators that an accountant had reviewed his tax returns after Geithner prepared them and didn't discover the problem.

But some tax experts said the problem is not that common.

Tom Ochsenschlager, vice president of tax for the American Institute of Certified Public Accountants, said it would be difficult for someone preparing a tax return for a self-employed person to skip the Social Security and Medicare tax lines.

"It's such a basic mistake that I kind of wonder if we know all the facts," Ochsenschlager said of Geithner's situation.

Geithner also said he 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 documents indicated.

The committee's records do not show how or when senators learned about the expiration of the housekeeper's work status. The committee reported that Geithner failed to get an I-9 form verifying legal work status for three people he employed as household help since 2004, instead jotting citizenship dates, passport numbers and relevant work status information into an address book.

One housekeeper's legal authorization to work in the United States expired on July 15, 2005 and the person continued to work for the Geithners until October of that year, the report says.

Democratic senators lined up Tuesday to offer their support for Geithner.

"Tim came to the committee, admitted he had made some mistakes, and was very contrite," New York Sen. Charles E. Schumer said in a statement. "In my opinion, these mistakes were not at all disqualifying."

Geithner is the second Obama Cabinet choice to face controversy. New Mexico Gov. Bill Richardson withdrew his name on Jan. 4 as Obama's commerce secretary after questions surfaced about a federal investigation concerning contributions and a state contract.

Geithner's tax problem was at least the second time such a situation has touched an Obama appointee. Nancy Killefer, the management consultant selected last week to become the new administration's chief performance officer, failed to pay unemployment compensation taxes, apparently on household employees. In 2005, the District of Columbia placed a $946.69 tax lien on her home over the unpaid taxes. Over a year and a half, she had failed to pay $298 in taxes plus the rest in interest and penalties, and she cleared up the debt within a few months.

So, Joe the Plumber owes back taxes and he's a bum. Will this guy get the same litmus test???? affraid
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Post  floridafun Tue Jan 13, 2009 11:40 pm

this guy will get his appointment. comparing him to joe the plumber is...uh...like comparing sarah to any functionally literate person in the country--sarah loses! pig rendeer (think moose instead of doe LOL!!)
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Post  Cincy Fan 44 Wed Jan 14, 2009 12:08 am

So there's nothing wrong with a guy who failed to pay his taxes running our country's Treasury Department? Geez Louise if a cabinet member doesn't have a link to the Clintonista admin then they've got back taxes problems! Razz
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Post  LTRT Thu Jan 15, 2009 5:16 pm

"Just a mistake, something that it commonly done" Very Happy
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Post  Guest Thu Jan 15, 2009 5:25 pm

Oh come on... how many "Joe the media whore's" do you know that work for the Int. Monetary Fund? It's an international body which adds the applicable taxes to your salary and then you have to pay the Social security taxes to your home country... he paid the personal soc. sec. taxes, just not the employers portion. Once he found out he wrote a check immediately. I think I heard he already paid $14K and he wrote a check for $26K for the employers part. Not that much IMO, proportional to what he probably made at the IMF.

I'd fire his CPA/Tax preparer if anything... and how many of those can say they specialize in the complexities of working for an international or foreign company?

He certainly wasn't a Mark Rich.


Last edited by meta4 on Thu Jan 15, 2009 5:27 pm; edited 1 time in total
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Post  Cincy Fan 44 Thu Jan 15, 2009 5:27 pm

LTRT wrote:"Just a mistake, something that it commonly done" Very Happy
Maybe for him...but for the little people like you and me it would be a case of "Your honor, I'd like to show the court Exhibit A (negligent back taxes)"
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Post  Guest Thu Jan 15, 2009 5:36 pm

He didn't exactly not pay his taxes he just didn't pay them all due to either negligence or evasion. In all honesty I don't see how he could have messed this up. No doubt that the tax codes are pretty complex but not when it comes to this in terms of self employment and having to pay both portions of the income tax. I have been self employed as well as employed and sometimes both at the same time and while I didn't make the money he made... it was pretty clear that I had to pay the employer portion of my self employed income.

I think that if this is a common problem for our leaders; then perhaps they all need to be audited to make sure they properly reported independent contractor income and payed the appropriate taxes. I'll bet that many are going back through their returns on their own as I type.

Not sure if this was an honest mistake or not so I'll reserve judgment on whether he's a "crook" or not.
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Post  Guest Thu Jan 15, 2009 5:41 pm

Meta, thanks for the clarification... I didn't understand how the international monetary fund worked.


I've messed up taxes before and the IRS doesn't put you in jail for mistakes... you pay them the money plus interest and penalties. shit I had to make payments over thirty months. The interest was cheaper than borrowing the money or using a credit card so I asked for a payment plan... unless you are evading taxes they will work something out ... hardly anyone ends up in jail.
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Post  Guest Thu Jan 15, 2009 5:43 pm

Vis wrote:you pay them the money plus interest and penalties

Yes, and he paid penalties as well for not paying on time.
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Post  Guest Thu Jan 15, 2009 5:50 pm

Yeah, I got a retail merchant license a few years back because I wanted to start a web store. I never sold anything online and when you apply, they ask you how much you estimate you'll sell per month. I said "gee, I don't know, maybe $200." She put down $500 and said that's what I wanted to put down. Come to find out, you have to report sales monthly, even if it's $0. Well I didn't do this for about 22 months and then I start to get these bills for taxes at $50 a pop or whatever... ($1350 total). So I called them and explained what happened. They sent me the necessary forms, I sent them back in showing $0 in sales for all 22 months, they called off the dogs, and refunded what I had paid (being ignorant, I just threw money at it hoping they'd go away - I know, stupid me.

They even refunded the interest and penalties.
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Post  Guest Thu Jan 15, 2009 6:19 pm

meta4 wrote:Yeah, I got a retail merchant license a few years back because I wanted to start a web store. I never sold anything online and when you apply, they ask you how much you estimate you'll sell per month. I said "gee, I don't know, maybe $200." She put down $500 and said that's what I wanted to put down. Come to find out, you have to report sales monthly, even if it's $0. Well I didn't do this for about 22 months and then I start to get these bills for taxes at $50 a pop or whatever... ($1350 total). So I called them and explained what happened. They sent me the necessary forms, I sent them back in showing $0 in sales for all 22 months, they called off the dogs, and refunded what I had paid (being ignorant, I just threw money at it hoping they'd go away - I know, stupid me.

They even refunded the interest and penalties.


Why aren't you in Jail????????? we kicked Joe the Plumber out of the country for less.


I had a similar thing with a business license, decided not to go through with the business then one day when refinancing to reduce my interest rate.. whammo a lien form the state on my house for unpaid taxes... I filled out a paper saying I never conducted business on the long ago expired license.. got a release of lien filed and they let me out of jail.
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Post  floridafun Fri Jan 16, 2009 9:52 am

kicked him out?? pig or gave him a job since he was unemployed anyway...i am hoping his next reporting gig will be in alaska to keep us updated on palins federal lawsuit and her 2nd nature battle-- to prevent the polar bears and the beluga whales from being listed as endangered (science shows both populations dwindling at alarming rates but sarah is unable to accept scientific conclusions unless they are pro-oil) because it would hamper her efforts to drill drill drill.
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Post  Cincy Fan 44 Fri Jan 16, 2009 10:10 am

floridafun wrote:kicked him out?? pig or gave him a job since he was unemployed anyway...i am hoping his next reporting gig will be in alaska to keep us updated on palins federal lawsuit and her 2nd nature battle-- to prevent the polar bears and the beluga whales from being listed as endangered (science shows both populations dwindling at alarming rates but sarah is unable to accept scientific conclusions unless they are pro-oil) because it would hamper her efforts to drill drill drill.
What was that rant in reference to?
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Post  Guest Fri Jan 16, 2009 10:40 am

Cincy Fan 44 wrote:
floridafun wrote:kicked him out?? pig or gave him a job since he was unemployed anyway...i am hoping his next reporting gig will be in alaska to keep us updated on palins federal lawsuit and her 2nd nature battle-- to prevent the polar bears and the beluga whales from being listed as endangered (science shows both populations dwindling at alarming rates but sarah is unable to accept scientific conclusions unless they are pro-oil) because it would hamper her efforts to drill drill drill.
What was that rant in reference to?

Joe the Plumber
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Post  Markwes Fri Jan 16, 2009 11:13 am

Cincy Fan 44 wrote:
floridafun wrote:kicked him out?? pig or gave him a job since he was unemployed anyway...i am hoping his next reporting gig will be in alaska to keep us updated on palins federal lawsuit and her 2nd nature battle-- to prevent the polar bears and the beluga whales from being listed as endangered (science shows both populations dwindling at alarming rates but sarah is unable to accept scientific conclusions unless they are pro-oil) because it would hamper her efforts to drill drill drill.
What was that rant in reference to?
It was another opportunity to slip a Sarah Palin bashing in there.
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Post  Guest Fri Jan 16, 2009 11:16 am

Markwes wrote:
Cincy Fan 44 wrote:
floridafun wrote:kicked him out?? pig or gave him a job since he was unemployed anyway...i am hoping his next reporting gig will be in alaska to keep us updated on palins federal lawsuit and her 2nd nature battle-- to prevent the polar bears and the beluga whales from being listed as endangered (science shows both populations dwindling at alarming rates but sarah is unable to accept scientific conclusions unless they are pro-oil) because it would hamper her efforts to drill drill drill.
What was that rant in reference to?
It was another opportunity to slip a Sarah Palin bashing in there.

Not unlike any television program that slips an advertisement in. Very Happy

I didn't change the channel... yet...
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Post  Markwes Fri Jan 16, 2009 1:31 pm

meta4 wrote:
Not unlike any television program that slips an advertisement in. Very Happy

I didn't change the channel... yet...
As long as it doesn't become an infomercial. Surprised
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Post  Guest Fri Jan 16, 2009 1:40 pm

Markwes wrote:
meta4 wrote:
Not unlike any television program that slips an advertisement in. Very Happy

I didn't change the channel... yet...
As long as it doesn't become an infomercial. Surprised

I doubt FF is really concerned with being "scolded" for talking during class (not that anyone's doing that). I don't mind at all if she beats that drum, as long as it's in time with the rest of the song...

Palin is pure humor all rolled up in a cute little governor package! Very Happy
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