![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
Too Taxing
Jan. 15th, 2009 09:03 amThe lesson of Geithner's IRS troubles.
By JAMES TARANTO
Timothy Geithner, President-elect Obama's Treasury nominee, has run into trouble with the Internal Revenue Service, as The Wall Street Journal reports. Geithner failed to pay his FICA (Social Security and Medicare) tax from 2001 through 2004, when he was an employee of the International Monetary Fund. IMF employees are technically considered independent contractors, which means that their FICA contributions take the form of self-employment tax.
In a 2006 audit, the IRS discovered Geithner had failed to pay the tax in 2003 and 2004. He was assessed $17,230, including interest. But the IRS's auditors did not do as thorough a job as the Obama transition team, which uncovered Geithner's failure to pay in 2001 and 2002, whereupon the nominee coughed up another $25,970:
Did Geithner have an incompetent accountant? Maybe. A Senate Finance Committee statement reports that he prepared his own returns for 2000, 2001, 2002 and 2005.
We're tempted to say America needs a Treasury secretary who is smart enough to figure out his own taxes. But such a cheap shot would be beneath us. Instead, we are going to make a serious point:
America needs a tax code simple enough for the Treasury secretary to figure out.
By JAMES TARANTO
Timothy Geithner, President-elect Obama's Treasury nominee, has run into trouble with the Internal Revenue Service, as The Wall Street Journal reports. Geithner failed to pay his FICA (Social Security and Medicare) tax from 2001 through 2004, when he was an employee of the International Monetary Fund. IMF employees are technically considered independent contractors, which means that their FICA contributions take the form of self-employment tax.
In a 2006 audit, the IRS discovered Geithner had failed to pay the tax in 2003 and 2004. He was assessed $17,230, including interest. But the IRS's auditors did not do as thorough a job as the Obama transition team, which uncovered Geithner's failure to pay in 2001 and 2002, whereupon the nominee coughed up another $25,970:
Other tax issues also surfaced during the vetting, including the fact Mr. Geithner used his child's time at overnight camps in 2001, 2004 and 2005 to calculate dependent-care tax deductions. Sleepaway camps don't qualify.
Amended tax returns that Mr. Geithner filed recently include $4,334 in additional taxes, and $1,232 in interest for infractions, such as an early-withdrawal penalty from a retirement plan, an improper small-business deduction, a charitable-contribution deduction for ineligible items, and the expensing of utility costs that went for personal use.
Amended tax returns that Mr. Geithner filed recently include $4,334 in additional taxes, and $1,232 in interest for infractions, such as an early-withdrawal penalty from a retirement plan, an improper small-business deduction, a charitable-contribution deduction for ineligible items, and the expensing of utility costs that went for personal use.
Did Geithner have an incompetent accountant? Maybe. A Senate Finance Committee statement reports that he prepared his own returns for 2000, 2001, 2002 and 2005.
We're tempted to say America needs a Treasury secretary who is smart enough to figure out his own taxes. But such a cheap shot would be beneath us. Instead, we are going to make a serious point:
America needs a tax code simple enough for the Treasury secretary to figure out.
