Cheat on Your Taxes? Run the IRS!

Cheat on Your Taxes? Run the IRS!

Excerpt:

So much for the short-lived theory that the Obama administration would be more ethical, competent, and capable than the Bush administration. Inauguration Day hasn't even come yet, and we already find ourselves with Obama's first major presidential scandal.

As it turns out, Timothy Geithner, the man Obama tapped as the next Treasury secretary, has reportedly cheated on his taxes. Repeatedly. In addition, even after being audited, he didn't make amends for all the years he failed to pay his self-employment taxes, until being tapped to run Treasury.

A history of poor tax compliance

Messing up once? Having to file an amended return because of a data entry error or a late-arriving and changed 1099 form? That's completely understandable. But I think that what Geithner has done, repeatedly and over the span of about a decade, makes him -- at minimum -- unfit to head the agency in charge of the Internal Revenue Service.

According to a document from the U.S. Senate, Geithner:

• Didn't pay more than $34,000 in self-employment taxes between 2001 and 2004.
  
• Didn't pay up on part of those back taxes until he was tapped to be Treasury Secretary.
  
• Attempted to deduct overnight-camp expenses for his kids as dependent-care costs.
  
• Failed to pay the 10% penalty on an early IRA withdrawal.
  
• Waited until 1996 to file Social Security and Maryland FUTA taxes for his household help between 1993 and 1995.
  
• Got a notice in 1998 for incorrectly calculating Medicare taxes for his household help.
  

...

If you or I or any other mere mortal were to try to pull such shenanigans, we would have been socked with penalties, on top of back taxes and interest. Instead, the IRS graciously waived the penalties on Geithner. Nice of them to treat their new boss so much better than they would treat ordinary taxpayers, eh?

Comment: I don't care if he is a financial "wunderkind" ... he shouldn't be at Treasury!

Updated: IMF Informed Geithner on Taxes

Current and former IMF officials said the fund provided numerous warnings to U.S. employees about payroll taxes. According to IMF documents released by the Senate Finance panel, Mr. Geithner regularly received information about his tax obligations.

Mr. Geithner didn't make any Social Security or Medicare tax payments on his income during the years he worked for the IMF, though he did pay income taxes. After the Internal Revenue Service audited him in 2006 and discovered the payroll-tax errors, Mr. Geithner corrected them for 2003 and 2004. Only after Mr. Obama picked him for Treasury secretary last fall did Mr. Geithner pay the Social Security and Medicare tax he owed for 2001 and 2002.