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A Rocky Road for Treasury Secretary-Designee Geithner?

January 13, 2009 4:15 PM

The Senate Finance Committee, which will oversee the confirmation hearings of Treasury Secretary designee Tim Geithner, has been meeting today to discuss some tax issues lurking in the past of the former New York Federal Reserve Bank president.

In a statement from incoming White House press secretary Robert Gibbs, a statement of support and an acknowledgment of mistakes:

"The president-elect chose Tim Geithner to be his Treasury Secretary because he's the right person to help lead our economic recovery during these challenging times," Gibbs said. "He's dedicated his career to our country and served with honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed. He made a common mistake on his taxes, and was unaware that his part-time housekeeper's work authorization expired for the last three months of her employment. We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country."

The basic issue seems to be that when Geithner worked at the International Monetary Fund from 2001 to 2003, he filed his taxes improperly, and he also for a time employed someone who didn't have legal immigration status.

The tax issue, as I understand it, is that IMF employees receive W-2s as employees and are treated as if they were self-employed, so they do not have federal and state taxes withheld from their paychecks. As part of Geithner's vetting, the Obama Transition Team discovered that he had not paid self-employment taxes in 2001 and 2002.

On Nov. 21, 2008, Geithner paid $25,970 in these overdue taxes plus interest -- $2,364 and interest of $956 for 2001 and $16,812 and interest of $5838 for 2002 (Geithner had been notified in 2006 by the IRS that he owed self-employment taxes and interest for 2003 and 2004, after which he paid tax and interest totaling $17,230).

Which begs the question: If the IRS notified Geithner in 2006 that he owed self-employment taxes for his time at the IMF in 2003 and 2004, why did he not realize that those taxes should have applied to him in 2001 and 2002 as well?

There is another -- what seems to me to be a lesser -- issue with a housekeeper that the Geithners employed to clean their home from 2004-2005. She had a current Employee Authorization Document at the time she was hired, but three months before she stopped working for the family that authorization expired.

More to come as this all develops.

-- jpt

January 13, 2009 | Permalink | Share | User Comments (179)

User Comments

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The rules and the standards are always lowered for the powerful and/or wealthy.

Posted by: anak | Jan 15, 2009 10:50:15 PM

YES,
Let me refresh your memory,the opposit of yes is " NO ". NO,NO,NO,

HAS THE AMERICAN PEOPLE FORGOTTEN THAT WORD???,I KNOW YOU ALL KNOW THE WORD "IF",I HEAR THAT WORD ALL THE TIME
IF,THE GOVERNMENT WOULD,JUST INCREASE MY
FOOD STAMPS,IF THEY WOULD INCREASE MY CHILD SUPPORT CHECK,IF,THEY(THE GOVERNMENT)WOULD INCREASE MY SOCIAL SECURITY???,IF ,IF,IF,IF, IS LIKE WISHING,TOO FILL UP YOUR HAND,SOME OF YOU,KNOW WHERE I'M GOING,"I THINK"
GO FIGURE,I BELIVE,SENATOR HATCH,HIT IT ON TARGET.
WHEN HE PRAISED"TIMMY"GEITHNER , AS THE SAVIOR"
OF THE "GLOBAL FINANCIAL SYSTEM".

aS HEAD OF THE "NEW YORK "FEDERAL"RESERVE BANK(not a government agency).HE HAS POLITICAL TIES,TOO THE NATIONAL AND INTERNATIONAL AND / OR "GLOBAL"AND UNITED NATIONS SYSTEM,DOES ANYONE HEAR THE SOUND OF"ONE WORLD GOVERNMENT"OUT THERE??
HELLO UNITED?STATES OF AMERICA.
YES,YES,LADY LIBERTY=LADY LIBERTY-WHERE FORE ART THOU,OH LADY LIBERTY???????????????.

Posted by: JAMES G Conley,Sr. | Jan 15, 2009 3:25:10 PM

This guy is going to continue the Wall Street handout. His experience in NY works against him. All they expect from the Treasury secretary is to hand the bn of $$ to Wall Street without delays or questions. Obama is just paying the election debts, including the release of the second part of the handout package. Wake up!

Posted by: cwucnspt | Jan 14, 2009 7:58:21 PM

Write to your Senators and let them know how you feel about tax cheaters running our Treasury.

Dear Senator----
I am writing you to ask that you DO NOT SUPPORT the nomination of Timothy Geithner for Secretary of the Treasury. It is absolutely unconscionable to consider appointing him to be the head of our national treasury after learning that he DID NOT PAY HIS TAXES for FOUR YEARS from 2001 to 2004.

No Tax Cheats for Treasury!

Please do the right thing and ask Pres-elect Obama to rescind his name. How could he even consider someone who has cheated on his taxes.

Posted by: BAK | Jan 14, 2009 4:59:21 PM

It's funny watching the subject being changed to Joe Plumber. lol

So, if Joe Plumber robs a bank, then it's OK for Geithner to rob a bank, huh? Or if Sarah Palin doesn't pay a tax, it's OK for Geithner not to pay his taxes? Soon, I expect the subject to be changed so that it is Bush's fault.

Posted by: Sigmond | Jan 14, 2009 4:59:01 PM

perfos,


Sounds like a damn lame excuse. This guy SHOULD KNOW better...he is not just another employee!


AND....you know you would all over this if this were a Republican nominee!!!!

Posted by: Mike_C | Jan 14, 2009 3:16:28 PM

"His mistake was a common one for people hired by international organizations that don't pay the employer share of Social Security taxes. The IRS estimated in 2007 that as many as half those employees had made tax-filing mistakes, and offered a group settlement to let them correct the errors. Geithner told Obama's team and senators that an accountant had reviewed his tax returns after Geithner prepared them and didn't discover the problem."

Posted by: pefros | Jan 14, 2009 2:40:07 PM

Yes, let's nominate a tax cheat to run the IRS. Another ethically challenged Obama appointee to add to the collection of Bill Richardson, Hillary Clinton, Eric Holder, Rahm Emanuel etc. I'm the sure the list will continue to grow. I'm still waiting for that Hope and Change I was promised, 'cause so far I'm not seeing it.

Posted by: EyeDoc | Jan 14, 2009 1:59:49 PM

I can't help but laugh at everybody on here saying he should have immediately gone back on previous years when this was caught. Every one of you on here in this same situation? If you did not have to go back? You would not. NO WAY. It's the American way to try to take advantage of something like this as much as you can. Those of you proclaiming you would? You're going partisan. Again, I worked in the field. I know behavior in this area. We try to get out of paying as much as we can.
----------------------------------
Susan,

He compounded it by not telling the Obama team during the vetting process. They found it and basically ordered him to deal with it. Only a liberal or a complete fool would think this guy with all his background simply forgot..even after being informed by the IRS.

Come On libbies...show some b@lls out there and stand up for the right thing. That alone would be "change". Demand this guy should be tossed aside!

Posted by: Mike_C | Jan 14, 2009 12:35:42 PM

Hello right-wingers. Making a mistake on your taxes and then rectifying it is not a crime. Tax evasion is criminal.

"Joe the Plumber" lied and evaded paying "socialist" taxes. See the difference?!
-----------------------------------
Common Sense ,

LOL, I am reminded of the old SNL skit with Dan Akroyd & Jane Curtain....

"Common Sense you ingnorant ****"

You and liberal cronies blasted "joe" and now you want to give this guy a pass.

This guy is a fraud, plain and simple. OOO, I fogot...DUHHHHHHH......

I am a contract engineer and have work for many companies over the years who simply pay my invoices with a check. No dedections at all.

I KNOW THAT I OWE TAXES ON THAT INCOME.

SO DOES HE!!! If he does not, then he is certain not qualified for the job he is up for.

I guess this "the change" we have been in need of. Personally I can do without it.

Posted by: Mike_C | Jan 14, 2009 12:32:09 PM

COMMON SENSE

Joe the Plumber" lied and evaded paying "socialist" taxes. See the difference?!

JOE IS NOT GOING TO BE IN CHARGE OF THE IRS...... geeezzzzzzzzzzz do you people think before you write???

Posted by: pat | Jan 14, 2009 10:41:11 AM

SUSAN
I worked in the field. I know behavior in this area. We try to get out of paying as much as we can.

yep thats the liberal way.... your 100% right!!!

Posted by: dave | Jan 14, 2009 10:36:21 AM

"It's the American way to try to take advantage of something.."

It's also the American way to hold people accountable when they break the law, no?

Posted by: Sigmonde | Jan 14, 2009 10:13:27 AM

I can't help but laugh at everybody on here saying he should have immediately gone back on previous years when this was caught. Every one of you on here in this same situation? If you did not have to go back? You would not. NO WAY. It's the American way to try to take advantage of something like this as much as you can. Those of you proclaiming you would? You're going partisan. Again, I worked in the field. I know behavior in this area. We try to get out of paying as much as we can.

Posted by: Susan | Jan 14, 2009 8:15:06 AM

if Tim Geithner can't handle his own taxes, how can he be trusted to be secretary of the treasury? an "honest mistake" as secretary of treasury could cost the nation trillions. here is another american citizen, a high profile one, who apparently hires illegal aliens. americans should not be angry at illegals but at americans, like Geithner and et al, that continue to hire them. Geithner should not be confirmed as secretary of treasury, no cabinet post for him but can be hired as an advisor on obama's staff where he can be supervised from making any further honest mistakes. idiot.

Posted by: Lawrence | Jan 14, 2009 8:14:11 AM

Obama is losing his rock star luster. Wow - a Treasury dept nominee who cannot even do his own taxes or hire legals to do work for him. TURBO TAX HELLLLOOO !! Maybe its time for all of us to trot to the bank and take out our money. The Obama team did not do a proper vetting job once again. Shame on them. They will need alot more than chants of hope and change now because the show is about to being and we demand ACTION, not just glorious oratory.

Posted by: jimbo | Jan 14, 2009 8:11:34 AM

Elle wrote: "Ordinary citizens who fail to pay their taxes properly are crucified for doing so - even IF they really DID make an honest mistake they are not given the opportunity to say "I'm sorry" and get away with paying the taxes owed plus interest - they are jailed."............ Are you kidding me? I used to work in this area. Mistakes happen all the time. They don't jail people for a mistake. If this were the case everybody ever audited would serve time because they always find something to pick at.

Posted by: Susan | Jan 14, 2009 8:01:10 AM

WOW!! What a difference from the last time our President selected a nominee for a Cabinet position. It's a good thing he's a Democrat, and Jon Kerry likes him, or this little "mistake" would be a SCANDAL of major proportions!!! I wonder if I can now use this same lame excuse when the tax man knocks on MY door, asking me to cough up MY contributions to the cause?

Posted by: Fiercely_Independent | Jan 14, 2009 7:18:48 AM

It is a disgrace that this person is still being considered for this position.If any of us did not pay our taxes there would be major grief. This person scams the system and he is being considered for Treasury Secretary. It is a disgrace. What happened to all the "change" we were going to get?

Posted by: Ralph | Jan 14, 2009 6:44:32 AM

"His mistake was a common one for people hired by international organizations that don't pay the employer share of Social Security taxes. The IRS estimated in 2007 that as many as half those employees had made tax-filing mistakes, and offered a group settlement to let them correct the errors. Geithner told Obama's team and senators that an accountant had reviewed his tax returns after Geithner prepared them and didn't discover the problem."

Posted by: pefros | Jan 14, 2009 6:12:52 AM

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