[marketheal]

Geithner Backed by Obama, Lawmakers After Queries

Jan. 13 (Bloomberg) -- Treasury Secretary-designate Timothy Geithner won Senate Finance Committee Chairman Max Baucus’s support after answering questions about almost $50,000 in back taxes and interest he owed to the Internal Revenue Service.

“We need a Treasury secretary quickly given the dire economic straits we’re in,” Baucus said after the panel held an emergency meeting today to discuss the issue. The committee set Geithner’s confirmation hearing for Jan. 16.

President-elect Barack Obama nominated Geithner to take over the Treasury Department as the government grapples with the worst financial crisis in decades and an economy mired in recession. The Treasury oversees the IRS, the country’s tax-collecting agency.

“We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country,” Obama spokesman Robert Gibbs said in a statement.

At issue is Geithner’s failure to pay self-employment taxes while working at the International Monetary Fund. In addition, questions were raised about a lapse of his housekeeper’s legal status. Geithner said he was unaware that the woman’s immigration papers had expired three months before she stopped working for him, according to an official on Obama’s transition staff. The Finance Committee said taxes for the housekeeper were “appropriately paid.”

Hatch’s Support

Republican Senator Orrin Hatch and Democratic Senator Debbie Stabenow, both committee members, said they were satisfied with Geithner’s answers to their questions during the private meeting in Baucus’s office.

“I support him,” Hatch said. Stabenow said Geithner addressed the issues “forthrightly” during the meeting.

Geithner, 47, paid all his income taxes as an IMF employee but made what the transition official called a common mistake on his tax returns with regard to self-employment taxes.

According the Finance Committee, Geithner had to pay the IRS a total of $48,268 in taxes and interest.

He resolved part of the underpayments -- $16,732 with interest -- after an IRS audit in 2006 of his returns for 2003 and 2004. Another $25,970 was discovered as the Obama transition team vetted him for Treasury secretary, according to the panel. The Finance Committee staff discovered an additional $5,566 in taxes and interest that Geithner owed. He recently amended his returns for 2001, 2002, 2004, 2005 and 2006, the committee said in a memorandum released to the media.

Overnight Camp

Among the mistakes the committee staff identified were Geithner’s decision to classify the cost of sleep-away camps as “dependent care” in 2001, 2004 and 2005. An accountant who prepared his 2006 tax return warned Geithner that the expense wasn’t allowable “but he did not file amended returns at the time to correct the prior years,” the Finance Committee said.

Geithner’s service to the country “should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed,” Gibbs said.

Senator Chuck Schumer, a New York Democrat, said he doesn’t think the errors are enough to disqualify Geithner. “Many of my colleagues on both sides of the aisle agree with that,” he said.

The ranking Republican on the committee, Charles Grassley of Iowa, didn’t respond to reporters’ questions when leaving the meeting. Republican Senators John Ensign of Nevada, Jon Kyl of Arizona and Olympia Snowe of Maine declined to comment.

Won’t be Derailed

Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters he was “not concerned at all” about the matter. He called Geithner, currently the president of the Federal Reserve Bank of New York, “extremely well qualified.”

Stan Collender, a former House and Senate Budget Committee analyst, said Geithner’s nomination isn’t likely to be derailed by the tax and housekeeper revelations, especially in the Democratic-controlled Congress.

“It’s like a parking ticket,” Collender said. “I can’t imagine in the current environment it would be much of a problem.”

There is ample precedent for immigration roadblocks in the Cabinet appointment process. President George W. Bush’s choice for labor secretary, Linda Chavez, withdrew her nomination in 2001 after she was criticized for providing lodging and money for an illegal immigrant a decade earlier.

Former New York City Police Commissioner Bernard Kerik pulled his name from consideration for secretary of Homeland Security in 2004, citing a failure to file taxes and other legal papers for an immigrant he employed as a housekeeper and nanny.

Zoe Baird

Bush’s predecessor, Bill Clinton, stumbled when he named Zoe Baird to the post of attorney general. Baird withdrew from consideration in 1993 because of revelations that she employed illegal immigrants as domestic workers without paying the required Social Security taxes. Clinton’s second choice, Kimba Wood, stepped aside weeks later after administration officials learned she had employed an illegal alien as a babysitter.

“I do think there’s a double standard there,” Chavez said in a telephone interview today. “That’s politics, and the Democrats are in control and apparently they are much more willing to forgive somebody who may not have lived up to the letter and spirit of the law.”

Chavez, now chairman of the Center for Equal Opportunity in Falls Church, Virginia, also said “people tend to react very negatively if the immigration issue is raised.”

Still, Chavez said the issue for Geithner isn’t major. “It frankly doesn’t bother me all that much that he had this problem,” she said.

Is this going to be one of those it takes a thief to catch a thief situations? .

[Indidockobeni]

Geithner Backed by Obama, Lawmakers After Queries

Jan. 13 (Bloomberg) -- Treasury Secretary-designate Timothy Geithner won Senate Finance Committee Chairman Max Baucus’s support after answering questions about almost $50,000 in back taxes and interest he owed to the Internal Revenue Service.

“We need a Treasury secretary quickly given the dire economic straits we’re in,” Baucus said after the panel held an emergency meeting today to discuss the issue. The committee set Geithner’s confirmation hearing for Jan. 16.

President-elect Barack Obama nominated Geithner to take over the Treasury Department as the government grapples with the worst financial crisis in decades and an economy mired in recession. The Treasury oversees the IRS, the country’s tax-collecting agency.

“We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country,” Obama spokesman Robert Gibbs said in a statement.

At issue is Geithner’s failure to pay self-employment taxes while working at the International Monetary Fund. In addition, questions were raised about a lapse of his housekeeper’s legal status. Geithner said he was unaware that the woman’s immigration papers had expired three months before she stopped working for him, according to an official on Obama’s transition staff. The Finance Committee said taxes for the housekeeper were “appropriately paid.”

Hatch’s Support

Republican Senator Orrin Hatch and Democratic Senator Debbie Stabenow, both committee members, said they were satisfied with Geithner’s answers to their questions during the private meeting in Baucus’s office.

“I support him,” Hatch said. Stabenow said Geithner addressed the issues “forthrightly” during the meeting.

Geithner, 47, paid all his income taxes as an IMF employee but made what the transition official called a common mistake on his tax returns with regard to self-employment taxes.

According the Finance Committee, Geithner had to pay the IRS a total of $48,268 in taxes and interest.

He resolved part of the underpayments -- $16,732 with interest -- after an IRS audit in 2006 of his returns for 2003 and 2004. Another $25,970 was discovered as the Obama transition team vetted him for Treasury secretary, according to the panel. The Finance Committee staff discovered an additional $5,566 in taxes and interest that Geithner owed. He recently amended his returns for 2001, 2002, 2004, 2005 and 2006, the committee said in a memorandum released to the media.

Overnight Camp

Among the mistakes the committee staff identified were Geithner’s decision to classify the cost of sleep-away camps as “dependent care” in 2001, 2004 and 2005. An accountant who prepared his 2006 tax return warned Geithner that the expense wasn’t allowable “but he did not file amended returns at the time to correct the prior years,” the Finance Committee said.

Geithner’s service to the country “should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed,” Gibbs said.

Senator Chuck Schumer, a New York Democrat, said he doesn’t think the errors are enough to disqualify Geithner. “Many of my colleagues on both sides of the aisle agree with that,” he said.

The ranking Republican on the committee, Charles Grassley of Iowa, didn’t respond to reporters’ questions when leaving the meeting. Republican Senators John Ensign of Nevada, Jon Kyl of Arizona and Olympia Snowe of Maine declined to comment.

Won’t be Derailed

Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters he was “not concerned at all” about the matter. He called Geithner, currently the president of the Federal Reserve Bank of New York, “extremely well qualified.”

Stan Collender, a former House and Senate Budget Committee analyst, said Geithner’s nomination isn’t likely to be derailed by the tax and housekeeper revelations, especially in the Democratic-controlled Congress.

“It’s like a parking ticket,” Collender said. “I can’t imagine in the current environment it would be much of a problem.”

There is ample precedent for immigration roadblocks in the Cabinet appointment process. President George W. Bush’s choice for labor secretary, Linda Chavez, withdrew her nomination in 2001 after she was criticized for providing lodging and money for an illegal immigrant a decade earlier.

Former New York City Police Commissioner Bernard Kerik pulled his name from consideration for secretary of Homeland Security in 2004, citing a failure to file taxes and other legal papers for an immigrant he employed as a housekeeper and nanny.

Zoe Baird

Bush’s predecessor, Bill Clinton, stumbled when he named Zoe Baird to the post of attorney general. Baird withdrew from consideration in 1993 because of revelations that she employed illegal immigrants as domestic workers without paying the required Social Security taxes. Clinton’s second choice, Kimba Wood, stepped aside weeks later after administration officials learned she had employed an illegal alien as a babysitter.

“I do think there’s a double standard there,” Chavez said in a telephone interview today. “That’s politics, and the Democrats are in control and apparently they are much more willing to forgive somebody who may not have lived up to the letter and spirit of the law.”

Chavez, now chairman of the Center for Equal Opportunity in Falls Church, Virginia, also said “people tend to react very negatively if the immigration issue is raised.”

Still, Chavez said the issue for Geithner isn’t major. “It frankly doesn’t bother me all that much that he had this problem,” she said.

Is this going to be one of those it takes a thief to catch a thief situations? .

[9rCR9hWL]

Among the mistakes the committee staff identified were Geithner’s decision to classify the cost of sleep-away camps as “dependent care” in 2001, 2004 and 2005. An accountant who prepared his 2006 tax return warned Geithner that the expense wasn’t allowable “but he did not file amended returns at the time to correct the prior years,” the Finance Committee said.

Geithner’s service to the country “should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed,” Gibbs said.


Do not jibe.

But, otherwise, so what?

ACK!

[JosephEL]

Geithner's story on the tax mistakes stinks, but nothing's going to happen because everyone is freaked out about the economy.

[JasminBerkova]

Geithner's story on the tax mistakes stinks, but nothing's going to happen because everyone is freaked out about the economy.

Wouldn't the state of the economy be a reason to give the situation even greater weight?

[Laqswrnm]

Apparently he had a letter from a CPA telling him not to pay that tax but when he switched CPAs and the new CPA said he did have to pay so he paid it. Really no big deal.

[galaktiusman]

Apparently he had a letter from a CPA telling him not to pay that tax but when he switched CPAs and the new CPA said he did have to pay so he paid it.

Wrong. He paid back taxes for 2003 and 2004 only after an audit in 2006. He didn't pay his back taxes for 2001 and 2002 until Obama considered nominating him for Treasury secretary. It doesn't seem likely that he would have ever paid these back taxes if not for political reasons.

http://www.nytimes.com/2009/01/14/us...pagewanted=all

[hotelhyatt]

No. Geithner is already deeply involved in the attempts to fix the crisis thanks to his position with the New York Fed. He's a good choice to maintain continuity and get any new plan moving quickly, which is far more important at the moment than the fact that he cheated on his taxes.

OK I get it. We can't afford to be all moral and what not at this time of crisis. However if that were indeed the case, why did Team Obama try and keep this secret until the WSJ blew the whistle on Tuesday?

[Sliliashdes]

Geithner's story on the tax mistakes stinks, but nothing's going to happen because everyone is freaked out about the economy.

Good! Hopefully this will reverse the Zoe Baird precedent.

[mQb0aVZe]

Good! Hopefully this will reverse the Zoe Baird precedent.

Can I ignore my taxes until I get appointed to a high office?

[Penisvergroesserung]

The future of America is more important than a silly law. We are in a crisis here people, don't you understand that. Sacrifices will be needed.

[goatteatromiag]

god, i hope that was sarcastic.

[Mjypksun]

Good! Hopefully this will reverse the Zoe Baird precedent.

I think Geithner's sin is far more serious than Baird's. It doesn't really make sense that you can get 86'd for giving illegal immigrants work (which Geithner also did, albeit probably innocently), but not for cheating on your taxes.

As Joe Biden said, paying your taxes is patriotic.

[insoneeri]

Quote:
Good! Hopefully this will reverse the Zoe Baird precedent.

I think Geithner's sin is far more serious than Baird's. It doesn't really make sense that you can get 86'd for giving illegal immigrants work (which Geithner also did, albeit probably innocently), but not for cheating on your taxes.

I agree, but if Geithner gets excused for this, others will hopefully be excused for lesser offenses.

[forebirdo]

DinoDoc seems to think that the IRS will stop functioning because the incoming SecTreas tried some bullshit on his personal taxes(which is something unheard of in America, I'm sure...)

[TughEmotteTug]

Normally I would have just assumed so, but Since the ONE got elected, there's been a lot of kool aid drinking around here. Eh, honeymoon will be over sooner or later.

Is this really the best that Obama could do? I mean honestly. The man knew what he was buying before he made the appointment. I don't see why the honest taxpayers should be going through the extra effort to comply with the regulations when it's obvious that the elite are above the law.

Obama needs the taxes he can collect. I don't see why he would be giving people excuses to cheat.

[AnypecekceS]

Fix it?
You characterize the efforts and policies he was involved in and supporting so far as 'fixing the problem'?

Yes, if you find a mistake has been made then you file an amended tax return in order to fix the mistake. Apparently this was a complicated case as he was working for the World Bank at the time which is treated like working in another country but isn't another country. The CPA he had been using for years wasn't aware of the intricacies of this sort of case so he gave (in writing) bad advise. Later on when he switched CPAs the new CPA reviewed his other recent returns, identified the error, and amended returns were filed. I'm still not seeing a big deal here.

[7kitthuptarill]

Yes, if you find a mistake has been made then you file an amended tax return in order to fix the mistake. Apparently this was a complicated case as he was working for the World Bank at the time which is treated like working in another country but isn't another country. The CPA he had been using for years wasn't aware of the intricacies of this sort of case so he gave (in writing) bad advise. Later on when he switched CPAs the new CPA reviewed his other recent returns, identified the error, and amended returns were filed. I'm still not seeing a big deal here.

Where's this letter? I saw no mention of this in the Senate report.

[CVEGK7mV]

Probably didn't make the front page at redstate.com

[zilsolley3]

This response goes for Kuci as well. How can someone enforce the law or even convince people that they should fork over more money to the government when they act in such a fashion even after being informed they were in error?

Really easily. If someone disobeys the IRS, people with guns typically make their lives unhappy. And if you think he's setting a bad example, that worry is really overblown IMO. No one will remember this in a month unless y'all actually get your way and he has to withdraw. (Even then, only a few people will remember in a month.)