Great stuff from Byron York over at the National Review, bottom line is that it makes no sense to have the head of the Internal Revenue Service (IRS) be a person who does not even play by the rules of the IRS. If this guy was nominated for Secretary of the Interior or something, that’s a different story, but Treasury? Come on. Anyway a few excerpts. Link to full article is above…
In their defense of Treasury Secretary–designate Timothy Geithner, members of the Obama transition team have said that his failure to pay Social Security and Medicare taxes during a 2001–03 stint at the International Monetary Fund was a “common mistake,” and, in addition, that Geithner received the approval of two accountants for his erroneous tax returns. Now, new details are emerging that cast doubt on both of those arguments.
But that figure appears to be a significant exaggeration of the specific situation at the International Monetary Fund, where Geithner worked. “There’s not a high incidence of non-payment of taxes,” Bill Murray, an IMF spokesman, told me Thursday. “We have a very low incidence of that here.”
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As for the matter of Geithner’s accountants, a memo issued by the Obama transition earlier this week said that Geithner prepared his 2001 returns—the first in which he failed to pay self-employment tax—himself. “However, an accountant reviewed his 2001 returns as part of an amended return filed [in] 2002,” the transition memo said, “and also failed to catch the mistake on the self-employment taxes.”
It turns out that is not the complete story. According to knowledgeable sources, Geithner, when he prepared his original 2001 return, reported that he would make a pension contribution. He later decided not to make that contribution and therefore needed to file an amended return. He approached an accountant for the specific purpose of changing the pension contribution entry and filing the amended return. It appears that Geithner gave the accountant the tax return, but no underlying documentation.
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The transition office also says another accountant prepared Geithner’s 2003 and 2004 returns—2003 was the last one in which Geithner actually worked for the IMF. The transition memo says that the second accountant “prepared Mr. Geithner’s 2003 and 2004 returns and advised him in writing that he was exempt [from] self-employment taxes on his IMF income.”
If that is the case, it is still true that Geithner filed his 2001 and 2002 returns—and collected reimbursement from the IMF for doing so—without paying self-employment taxes. And whatever the second accountant said, it appears that Geithner himself has not claimed to investigators that he believed he was exempt from paying the self-employment tax. If he had been assured by experts that he was exempt, then he might have been expected to make that argument, but he didn’t. Instead, it appears Geithner has told investigators that he wasn’t aware that he hadn’t made the payments, that it somehow slipped by him.
Geithner’s confirmation hearing is now set for Wednesday. Look for these issues to be the subject of extensive questioning.
