Thursday, January 15, 2009

It's Hard Out There for An IMF Employee

Lots of sturm and drang about Tim Geithner's taxes. See Shakespeare's Sister and some bloviator John Cole found. To answer the bloviator's question, the deal Geithner is getting is not "don't pay taxes until you get nominated to be Secretary of the Treasury". The deal is "work for an international non-profit which has unusual withholding policies, have your accountant miss your tax liability, have the IRS miss the fact you still owe them money, then have the Transition Team's vetters figure out that you still owe some back taxes." There's no evidence that Geithner was trying to cheat the government out of any money; he just messed up. These things happen; it's why we have an IRS, people should just stop freaking out. Sheesh.


corvus said...

I love that it's the Obama transition team that found it. More thorough when checking someone's taxes then the IRS? That's thorough.

And SS's complaint seems unfounded. I mean, if the IRS is just happy he paid them back, then it's not as if he broke the law or something, did he? I enjoy some class warfare as much as the next person, but this is a really poor battle to pick.

Blue said...

It seems that he didn't pay some of the taxes back because of the statute of limitations had expired (3 years). I feel it's pretty untoward for senior public servants to not pay the full taxes they owed at some point because of the statute of limitations.

And this will be another annoying GOP talking point we have to listen to for the next 8 years. "The tax code is so complicated that even Obama's treasury secretary can't do his taxes right."

Anonymous said...

Rousseau -- from the second article John Cole linked:

In 2006, the IRS audited Geithner’s 2003 and 2004 returns and charged him accordingly. But Geithner didn’t pay his 2001 and 2002 back taxes until the Obama transition team that vetted him brought the oversight to his attention.

Typically, there’s a three-year statute of limitations on IRS audits, Lloyd said. After that, the years are considered “closed” and the IRS will reject additional payments.

“We’ve had clients come and say they want to make payments for a closed year,” he said. “The IRS sends the money back.”

Sounds like he initially didn't pay those taxes because he didn't know about the problem that year, and then when the transition team let him know he paid them even though the statute of limitations had expired. (Should he have realized that there was a mistake in 2001-02 when the 2003-04 audits revealed a similar mistake? Maybe; but in 03-04 he used an accountant and in 01-02 he did them himself, so he might not have realized that there was the same mistake both times.)

drip said...

I don't think that the IRS necessarily missed the earlier error, its just it was outside the statute of limitaions on assessments (3 years with some extensions). The statute under which the IRS will send payments back is when a tax is uncollectible due to the statute of limitations on collections (10 years from assessment.) So Geithner was under no legal obligation to make the payment on the earlier years, but he was certainly able to do. Another way of looking at this is that Geithner paid $35,000 or $40,000 to become Treasury Secretary. He wouldn't have been my choice, but it's hard to fault him on this.

BruceMcF said...

Its why we used to have an IRS ... more and more we have a shell of an IRS with essential functions outsourced.

Tlazolteotl said...

I'd still like to know more about the supposed 'housekeeper problem.' Did he hire a nonlegal migrant to do housework? I''m not sure if that was what was being alleged, but I am suspicious of a double standard (it's okay for a man, because his wife was supposed to run the household; recall that a prior female cabinet designate had a 'nanny problem' and it sank her nomination).

Anonymous said...

Did he hire a nonlegal [im]migrant to do housework?

Nothing I've read has indicated that this is the case. The woman he hired was legally authorized to work in the U.S. when he hired her; her papers expired after he had hired her. Again, this seems like penny-ante bullshit.

The women whose nominations were derailed over "nanny problems" were Zoe Baird, Kimba Wood, and Linda Chavez. In all three cases the immigrants in question were undocumented when hired. Baird additionally blotted her copybook by failing to pay social security taxes for the chauffeur and nanny; Wood really got screwed over, because it was legal to employ undocumented immigrants at the time, and she paid the taxes, so her problem was partly that Republicans are dicks; Chavez claimed that the woman in question was never an employee, but someone who she gave money to as charity and who did chores for her, which I think makes it safe to assume she didn't withhold Social Security taxes.

I can see that there might be something of a double standard especially with Wood, but the cases aren't exactly parallel.