Timothy Geithner---should he be the Sec of Treasury?
At the Senate confirmation hearings, it was revealed through documentary evidence that Geithner had not paid $35,000 self-employment taxes for several years, even though he had acknowledged his obligation to do so, and had filed a request for, and received, a payment for half the taxes owed. The failure to pay self-employment taxes was noted during a 2006 audit by the Internal Revenue Service, in which Geithner was assessed additional taxes of $14,847 for the 2003 and 2004 tax years. Geithner failed to pay, or to admit his failure to pay, the self-employment taxes for the 2001 and 2002 tax years until after President-elect Obama expressed his intent to nominate Geithner to be Secretary of Treasury. He also deducted the cost of his children's sleep-away camp as a dependent care expense, when only day camp is eligible for the deduction. Geithner subsequently paid the IRS the additional taxes owed, but was not charged a penalty for late-payment. In addition, his housekeeper's work authorization lapsed during the last three months she worked for him.
Geithner's employer at the time, the International Monetary Fund, gives its American employees the employer's half of the payroll taxes, expecting that the employees will deposit the money with the Internal Revenue Service. A report from the Senate Finance Committee documented Geithner's errors. While working for IMF, Geithner signed a tax worksheet stating his "obligation of the U.S. Social Security tax, which I will pay on my fund income" and another annual worksheet stating "I wish to apply for tax allowance of U.S. federal and state income taxes and the difference between the 'self-employed' and 'employed' obligation of the U.S. Social Security tax which I will pay on my Fund income."
In a statement to the Senate panel considering his nomination, Geithner called the tax issues "careless", "avoidable", and "unintentional" errors, and he said he wanted to "apologize to the committee for putting you in the position of having to spend so much time on these issues." Geithner testified that he used TurboTax to prepare his own return and that the tax errors are his own responsibility. The Washington Post quoted a tax expert who said that TurboTax has not been programmed to handle self-employment taxes when the user identifies himself as being employed. Geithner said at the hearing that he was always under the impression that he was an employee, not a self-employed contractor, while he served as director of the Policy Development and Review Department of IMF.
careless? Unavoidable? Unintentional? DOUBTFUL!!!!!