Posted on 01/14/2009 3:36:57 PM PST by Molly Pitcher
Although it has been dismissed by some observers as a “hiccup” in an otherwise smooth confirmation process, treasury secretary-designate Timothy Geithner’s failure to pay self-employment taxes during the years he worked at the International Monetary Fund is causing some Republicans on Capitol Hill to ask serious questions about his actions. First among those questions is why he accepted payment from the IMF as restitution for taxes that he had not, in fact, paid.
Documents released by the Senate Finance Committee strongly suggest that Geithner knew, or should have known, what he was doing when he did not pay self-employment taxes in 2001, 2002, 2003, and 2004. After his failure to pay was discovered, first by the IRS and later during the vetting process, Geithner paid the federal government a total of $42,702 in taxes and interest.
The IMF did not withhold state and federal income taxes or self-employment taxes — Social Security and Medicare — from its employees’ paychecks. But the IMF took great care to explain to those employees, in detail and frequently, what their tax responsibilities were. First, each employee was given the IMF Employee Tax Manual. Then, employees were given quarterly wage statements for the specific purpose of calculating taxes. Then, they were given year-end wage statements. And then, each IMF employee was required to file what was known as an Annual Tax Allowance Request. Geithner received all those documents.
The tax allowance has turned out to be a key part of the Geithner situation. This is how it worked. IMF employees were expected to pay their taxes out of their own money. But the IMF then gave them an extra allowance, known as a “gross-up,” to cover those tax payments. This was done in the Annual Tax Allowance Request, in which the employee filled out some basic information — marital status, dependent children, etc. — and the IMF then estimated the amount of taxes the employee would owe and gave the employee a corresponding allowance.
At the end of the tax allowance form were the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.” Geithner signed the form. He accepted the allowance payment. He didn’t pay the tax. For several years in a row.
According to an analysis released by the Senate Finance Committee, Geithner “wrote contemporaneous checks to the IRS and the State of Maryland for estimated [income] tax payments” that jibed exactly with his IMF statements. But he didn’t write checks for the self-employment tax allowance. Then, according to the committee analysis, “he filled out, signed and submitted an annual tax allowance request worksheet with the IMF that states, ‘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 conversation today with sources on Capitol Hill who are familiar with the situation, I asked, “Was Geithner made whole for tax payments that he didn’t make?”
“Yes,” one source answered. “He was getting the money. He was being paid a tax allowance to pay him for tax payments that he should have made but had not.”
Geithner paid his 2003 and 2004 obligations after an IRS audit. He paid his 2001 and 2002 obligations after he was nominated to be treasury secretary. The Obama transition team argues that Geithner simply slipped up, saying Tuesday that Gieithner “mistakenly had not paid self-employment taxes” for the years in question. In a closed-door meeting with Senate Finance Committee members on Tuesday, Geithner explained his failure to pay the self-employment taxes as an oversight. In the days before his confirmation hearing, senators are going to want to know more about how that happened.
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filthiest regime in US HISTORY thanks everyone that voted for the illegal alien commie.
Andrea Mitchell will laugh as she explains it away, he’s just sooo smart you know it just slipped past this guy because he’s soooo smart.
“Sloppy.” Just like Sandy Berger.
I admit Rush has me convinced that the media is in the tank for this guy, but it seems not entirely.
I'm withholding complete conviction that he's just another Democrat Thug.
Gee, I don't remember getting paid a "tax allowance" in addition to my salary. I guess I should have been working for the IMF.
This isn’t a problem.
We have an illegal alien as President so of course everyone else is corrupt.
God has turned his back on our once great nation.
Long live our dear leader.
end truth.
Obama said it was an “honest mistake”. He’s a democrat so it’s OK.
That sounds criminal to me.
But then I'm just a country lawyer.
comical... Does Obama know anyone who is normal?
This sure reminds me of the Clinton administration. Hmmm, wonder why? Could it be that the Clinton’s taught nouveau politicians how to work the system?
How many “Honest Mistakes” does this guy get before people start wondering if he’s a crook?
I’ve never worked for a place that wouldn’t have fired me for much less. I’ve never made enough to afford an illegal alien housekeeper either, but that’s not the point.
That's not entirely accurate. Citi got itself into where it got itself, I would think.
Notwithstanding, he does have a fascinating background, if this can be believed.
Me too, but the NY Times and the mainstream media won't care. Even some Republicans evidently are voting for the guy.
Move on. Nothing here.
The Messiah says that his tax man is just what we need.
WASHINGTON (Reuters) - Treasury Secretary nominee Timothy Geithner made “honest mistakes” on a tax issue and the employment of a housekeeper but they should not disqualify him from serving as at the top U.S. economic official, a senior aide to President-elect Barack Obama said on Tuesday.
Nuts...just nuts
Our great nation has turned it's back on God.
All revolutions seek to destroy the elite. Why do they think they are exempt?
same thing, same result, we’re done.
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