Witness the verbal gymnastics of Dan Maurer, Intuit SVP, as he tries to absolve both Tim Geithner and his firm from the mistakes on Geithner's return:
"Each year, millions of Americans use TurboTax to accurately prepare and file their federal and state tax returns," Dan Maurer, senior vice president and general manager of TurboTax, said in a statement late this afternoon. "The software helps taxpayers report their income and find the deductions and credits they're entitled to claim. TurboTax, and all software and in-person tax preparation services, base their calculations on the information users provide when completing their returns. TurboTax also has built-in error-checking tools that routinely catch common taxpayer mistakes. Federal law and our own privacy policy prohibit us from discussing specifics of any customer's return."Perhaps Obama's first act as president should be to introduce the reflexive into English in order to help business handle the increasing number of such delicate situations. One of the great charms of a language like Spanish is that no one ever screws anything up. Problems can be dismissed with an airy "se rompió"--it broke itself. The equivalent constructions in English, such as "mistakes were made", lack the elegant ubiquity.
That said, the fault can hardly lie with TuboTax, which cannot be expected to have a separate section to cover the special tax difficulties of a few thousand IMF employees out of the millions of returns it handles every year.
The National Review is skeptical that this can have been an honest mistake. On the one hand, whatever the difficulties of our tax system, I find it hard to imagine how anyone could confuse 1099 income with W-2 income. On the other hand, I've never worked for the IMF, and I don't know what sort of forms they hand people. And having spent sixteen hours doing my taxes last year--me, with no mortgage or depreciating assets, much less exotic tax-free financial instruments--I'm not willing to say that it couldn't have been simple human error.
So who to blame, in the absence of a convenient reflexive? My candidate is America's absurdly inefficient tax code. Tax simplification is one of the most economically productive reforms we could make. But there are just too many people getting tax credits who will fight fiercely to defend them. And Obama seems to share the mania for "targeted tax credits" aka opaque and inefficient subsidies.
We simplified the tax code in 1986, through a coming-together of Rostenkowski, Bradley, and Reagan. Since then, both parties have colluded in recomplexifying the code, because that's easier than passing programs to accomplish the same purpose and, perhaps, more simple to administer. Any future proposal to simplify taxes has to deal with that truth about our political system.
Jim Lindgren (Volokh Conspiracy) discusses this well and finds Geithner not seriously at fault. The problem arose from the fact that the income was reported on a W-2, not a 1099, yet was subject to self-employment tax. This is a very unusual situation: the SE tax normally applies only to income reported on a 1099 (or not reported at all). It is only in the case of some employees of international organizations that people get W-2 income subject to the SE tax.
"The National Review is skeptical that this can have been an honest mistake"
Please add "claims that it" before "is". If Geithner were a Republican, you could write that "The National Review claims that it believes this was an honest mistake." You can always -- always -- tell which way the National Review will come out on such a question just by looking at the person's political party.
Germans seem to do well with socializing mistakes as well, at least if our several German Au Pairs are any indication. One of them backed our car up into the side of a parked bus. Her only comment about the accident was that it wasn't there before.
We all try to blame everyone but ourselves, but her gymnastics trying to avoid any blame for this (and a more troubling accident involving our infant son rolling off of a couch) were amazing.
I thought I read that the IMF says it specifically warns American employees about this situation and their responsibilities.
To be clear, the IMF reports income to US citizens on a W-2, does include reminders about the SE tax issues along with a mountain of other information we must deal with on a daily basis, TurboTax can and has failed to identify the need to include the additional SE tax when the information is input correctly, and we are all human and can make mistakes.
There is also the gross-up he received to cover the employer payroll tax. That part is harder to explain.
I pulled out the Turbo Tax 2001 edition, and attempted to input wages on a W-2 without FICA. The program accepts it quite readily and does not produce any type of error message. It's easy to conclude that his omission was an easy error.
The more pointed question has been ask elsewhere: would he have amended 2001 and 2002 had it not been for his Treasury nomination.
I can tell you this, because I haven't been nominated. Had it been me, I would have had no legal obligation to amend and the IRS couldn't open the returns because statute had closed. Catch me if you can't!
This is hilarious! I guess we spend the next eight years disbelieving our own lying eyes.
Geithner attempted tax fraud and got caught. The only other conclusion is that the man is completely incompetent at managing financial matters.
Yancey,
Above a certain degree of complexity, mistakes are made because we are human.
Trying to blow this out of proportion is as pathetic as Glenn Reynolds posting story after story about the hacking of Sarah Palin's inbox.
It won't fly with intelligent people.
Well, I'm glad our Treasury will be headed by a man who realizes that properly filing and paying taxes takes a back seat to, ah, "a mountain of other information we must deal with on a daily basis."
One of the great charms of a language like Spanish is that no one ever screws anything up. Problems can be dismissed with an airy "se rompió"--it broke itself. The equivalent constructions in English, such as "mistakes were made", lack the elegant ubiquity.
Megan, the equivalent construction in English simply "it broke", which also obscures culpability for "it" being "broken".
As a general rule, if a tax error could plausibly be a good faith error, the presumption should be that it is a good faith error.
This guy gets a W-2 and fills out the Turbo Tax boxes that ask for W-2 info. Due to a very weird and unique situation, that is incorrect. I'm going to give him a break here, and really I think its kind of cool that the head of the treasury department is so cheap he didn't pay an accountant to do it for him even if it led to this.
ThePuzzledOne,
I understand that people make mistakes and oversights, but this clearly isn't the case here. Geithner just flat out lied in the hearing yesterday. It is good know that corruption and thievery have no place in the new administration.
I would suggest everyone actually watch the hearing from yesterday. If you are the sensitive type to liars, you will have a lot of fun watching Geithner answer the questions about his taxes.
I should probably take this observation to heart. It seems to me that libertarians and 'conservatives' are extremely reluctant to admit to any mistakes, much more so than other people. But perhaps this is just selection bias. I don't see this happening with moderates, but then again, they haven't been wrong in either degree or kind to the extent that others have been.
Also, if you're working in mathematics or the sciences, errors tend to be right out there; if your proof about a mathematical statement depends on a number being both even and odd, for example, it's hard to say that this is just an opinion, or that such numbers exist, it's just that no one has found them yet. Those are the sorts of errors that don't respect status, money, or power, and working with those types makes it easier - perhaps - to admit to mistakes in other areas.
Didn't he get audited and then have to pay this tax for the two audited years, but then only much later (like the day he got tapped for the new job) go back and pay for the two years prior to the audited period? Shouldn't the audit have tipped him off that there was something wrong in the previous two years? Don't IMF employees receive a special gross-up amount to pay the SE tax with? Did he think this was a bonus?
Should we not start auditing all current and former IMF employees on the assumption that this is a common "mistake"?
Okay, good, at least one other person finds it somewhat strange that a person of his status is using TurboTax.
May I suggest Confirmation bias?
As Dan Foster, MD said to me in an interview, 'Justice must not only be done, it must be seen to be done.' One could imagine that Geithner is correct about the W-2 situation; however, as I understand it, he took off, or took a child care credit, for overnight camp for a child. I have been using Turbo Tax since the midnineties and the instructions are pretty clear that that would not be an acceptable use of the credit, and they are absolutely clear that the credit is not applicable above an income of $125,00 or so. His income was $300,00 plus. Given these 2 events, I'm not inclined to think he is telling the truth. Not that that matters; in Napoleon's phrase it is going to be 'careers for talent.'
Wonderful example from Spanish se rompio but Silas Barta is right that "it broke" is almost the same thing. A comparably wonderful English construction is "it came into my possession."
As to TurboTax, I am inlcined to cut Geithner some slack while not fully believing him. I've been using TTax since the early 1990s and for about 10 years it got better, easier to use, and did more. Over the past few years it has gone past, and now way past, the optimum point on the curve and now is on the downslope.
TTax now gives Windows Vista a good run in the bloatware derby TTax now has multiple versions, overdone ease-of-use features that make it more slower and more laborious to use for anyone who is not a moron, and has elimiated numerous convenient features from previous versions (e.g., in this year's version there no longer is a convenient button to allow to print support details statements that you use to itemize specific amounts listed on a a given line in a form).
It's a lot like Symantec. I've loved Norton since I first started using Norton Utilities back around 1988, but Symantec has gone crazy with multiple versions of every program, overlapping programs and all sorts of needless complexity. This is a sure sign that dumb marketing types have taken over the asylum since they are destroying brand loyalty for very short term gains. Intuit is doing the same thing.
My apologies for this rave going off point here, but for the past 2 days I have been using TTax on my 2008 taxes and am in a bit of a snit, exacerbated by Norton Anti-Virus slowing down all the constant update downloads fromt he Intuit website. But Microsoft, Intuit and Symantec (and I note Oracle as well, given the horrors of PeopleSoft) are all doing for the U.S. software industry what General Motors, Ford and Chrylser did for the US auto industry: create it, make it master of the world, and then destroy by focussing on things like better ashtrays instead of better reliability. They are reverse alchemists: able to turn gold into lead.
My apologies for not turning off bolding in the post above. Keyboard rage. Another reason to telecommute instead of drive.
You guys are all missing the point here. The overarching question, the answer to which I haven't yet been able to find, is whether Geithner was using a PC or a Mac.
If we know that, everything else falls into place.
The only other conclusion is that the man is completely incompetent at managing financial matters.
Oh, I'm so sure it's completely obvious to you that you might have to pay "self-employment" tax on income you got working for someone else.
Give us a break.
I think Holdfast has it right above. I can believe that Geithner made an honest error, but not that after the audit he was unaware that he'd underpaid his tax for the two years for which the IRS couldn't legally ding him, the statute of limitations having taken effect. Obviously he just saw no point in paying more than the government could, at that point, force him to pay. He would've made a better impression had he just said as much.
Chet,
Oh, I'm so sure it's completely obvious to you that you might have to pay "self-employment" tax on income you got working for someone else.
Um, speaking as one who has had to pay self-employment tax many times: Yes.
It's an instructive exercise, really. You don't understand the size of the payroll tax until you've had the pleasure of paying both halves yourself.
Sorry, Chet, I didn't realize Geithner was illiterate as well (but that should be no barrier to being Treasury Secretary). The IMF warns in multiple, written ways that it is not responsible for collecting payroll taxes- that this is the responsibility of the employee. And, in any case, do you really believe that Geithner was completely unaware that no payroll taxes were being withheld from his salary for those years?
He's appointed now Yancey. Stop being a little bitch about it.
James Fallows weighs in:
"So by the standard of what the country needs right now, I would probably vote for Geithner's confirmation as Treasury Secretary, if I were in a position to do so.
But I do not believe, and will never believe, that his failure to pay his own self-employment tax while at the IMF was an "oversight" or a "mistake." I have many many friends who have worked for this and similar organizations. I have myself over the years juggled the complexities of what is self-employment income and what is W-2 income and how to handle income from non US-sources -- and I have a lot less financial acumen than any Treasury Secretary aspirant should and must have. (Though I also use Turbo Tax!) Not a single person I have known from the IMF or similar bodies, not a one, believes that Geithner could have "overlooked" his need to pay US self-employment tax. When I have received similar income from international sources, the need was obvious even to me -- and I wasn't receiving and signing all the forms to the same effect Geithner would have gotten from the IMF. I could go on with details but I'll just say: if this were a situation more average Americans had experienced personally, he would not dare make his "mistake" excuse because everyone would say, "Are you kidding me???""
Oh, I'm so sure it's completely obvious to you that you might have to pay "self-employment" tax on income you got working for someone else.
It probably would be if they gave me a pamphlet on the subject and also increased my take-home to cover the tax I was supposed to be paying myself. Especially if I was a financial type.
At best, this is a mistake the way Dan Rather mistakenly used those fake memos. And this is how I mean that.
Let's reveiw rathergate a little bit. Dan Rather puts out the report. Within a day Charles Johnson and the boys at powerline have raised very serious questions. Dan Rather responds with a report that misrepresents the concerns and dismisses them in that straw man matter and laughably refers to his source as "unimpeachable."
Up until then you could argue that Rather was making an honest mistake. But on that day it became clear the was not honestly owning up about his mistake. He was on notice that something was wrong, and he was pretendign nothing was wrong.
Ditto with this guy. I can accept that he didn't realize he was screwing things up at first. But when he had to correct 2 years of his returns, that should have told him that the previous 2 years were wrong, too, or at least suspicious. He should have gone back and checked. But he didn't, most likely because the statute of limitations passed.
That's the best case scenario. The worst case scenario is that he is he knew exactly what he was up to. This turbo tax story is part of that. The other things, well, bluntly, economics is his life, so shouldn't he be very focused on his money? Isn't that what you expect of a man in his profession. Its like a lawyer saying "i didn't know it was illegal" or a doctor saying, "i didn't realize my diet was bad for my health." i mean, um, shouldn't you know this sort of thing. shouldn't you pay more attention to it than most people?
Michelle has it exactly right. Those of us who have to pay SE tax find Geithner's story completely laughable. When you sign the contract, you KNOW that you have to pay 7.2% more in taxes than other people, and that there is no withholding. The employer makes damn sure you know. And it is a frequent topic of conversation. Everyone is well aware of the fact, and none too happy about it. Geithner might as well be saying that he didn't know how much paid vacation he was entitled to, or whether the IMF provided health insurance.
Let's see. We a tax code so complex that the IMF, TuroTax, the IRS and a president and chief executive officer of a Federal Reserve Bank can't get it right using simple "fill in the blanks" forms.
Amazing
The guy is a tax cheat. When he got audited in 2006 he was clearly told about his error. He paid his 2003 and 2004 taxes then but because he didn't have to pay the 2001 and 2002 taxes due to statute of limitations HE DIDN'T. He broke the law but was not legally liable to pay those taxes in 2006 when it was brought to his attention.
Every American taxpayer knows he's a cheat and some people will cheer the fact that he got away with it but the fact remains he was a tax cheat in 2001, 2002, 2003 and 2004 and only paid 2003 and 2004 when he was caught. He only paid the 2001 and 2002 taxes because he wanted to get confirmed.
There was no "error" and everyone knows it.
Failing to pay these taxes was no honest mistake. Check the other blogs, IMF employees were repeatedly told they had to pay self employment taxes, they were given paperwork that explained everything, as the IMF does this for many people. They were also given additional money to "gross up" their pay checks to cover this amount. What did he think the extra money was for, a bonus?
For ordinary people, there would be a very, very uncomfortable meeting at the IRS where you would basically be threatened with large fines and jail time. For the new Secretary of the Treasury -- he'll get a pass on this one.
Nobody has to wonder what Geithner was told by the IMF about SE taxes.
The Senate has prepared a very clear report, complete with supporting documents:
http://tinyurl.com/7u59c9 [pdf]
Everybody interested in this situation should read that PDF.
Geithner did not have to guess whether or not he was to pay SE taxes. He was very clearly told by the IMF that he had to. He was very clearly told by the IMF that he was being reimbursed for part of it.
If he disregarded this information, that was a choice he made. Turbo Tax can't tell him to read his employer-supplied annual tax statements.
The "problem" arose because Mr Geithner deliberately tried to evade the tax. There is no other explanation. I am happy to see men of power getting caught in the tax buzzsaw. I have two college degrees and over twenty years experience with computer technology, IT project budgets and software project management, and I cannot do my own taxes (with or without TurboTax).
Screw him.
I suppose that depends on whether my employer provided me with information saying that I was responsible for paying it, provided me with documentation calculating what I owed, provided me with an allowance to pay it after I applied for it, and had me sign a form acknowledging my responsibility to pay it.
I'm a tax professional. My software would have caught the error; "consumer grade" software would not. I'm willing to cut Geithner some slack and believe that his failure to pay the social security tax was not intentional.
However, I don't think the blame belongs with our overly complicated tax system. As much as our system needs simplification -- could I tell you stories -- Geitherner's error was NOT caused by any real complexity in the law. Schedule SE is one of the easiest of all tax forms to complete. It's not complex nor is the question of whether he owed the tax or not.
The error was caused by Geitherner's unacceptably lax approach to filing his returns. He was told by the IMF that he owed these taxes several times EACH YEAR he worked there. (He should have paid the social security taxes along with his quarterly estimated tax obligation. The IMF reminded him of this obligation each quarter AND told him how to calculate and report the tax.) He ignored these instructions (yet somehow found the time to figure out how to request reimbursement from the IMF for a part of the tax).
Should Geitherner's nomination be rejected based on this issue? Probably not. It should be turned down based on his participation in the bank bailout, but that's another topic.
It probably would be if they gave me a pamphlet on the subject and also increased my take-home to cover the tax I was supposed to be paying myself. Especially if I was a financial type.
It's obvious you are not a true believer in the innate goodness of liberals who try not to pay taxes. Shame on you!
It's funny how blind we can make ourselves when dazzled by the half-white sun of Obama. Yes, Turbotax may have issues, but, as you attempt to remind the sycophants, the plain fact remains that Giethner CLEARLY informed of his obligation to pay his taxes. And he must be either an idiot or a monumental cheat to think he could write off his kid's camp. I am comfortable with either option.
The question is: How could Joe Biden approve of this "unpatriotic" cheat who doesn't want to pay his fair share?
Using a W-2 Geithner would have had to enter the ZERO in the space(s) for what was withheld.
That would be a CLUE for any normal person that something was off.
But Geithner is smarter than the rest of us, so I guess that doesn't count.
He was told by IMF that he had to pay the taxes, his pay was increased to help cover the taxes, he got a W-2 with tax fields that were either empty or contained "NONE" and when he entered the information in TurboTax he would had to have left the tax fields for that W-2 empty or entered 0.
Exactly how many double standards are there in this case?
- common citizen makes this "mistake," gets hammered with not only the back payment, but penalties and interest. Dem appointee walks away with partial back payment, gets appointment to high level gov't position.
- Guy that asks Obama a tough question gets hammered by the press for having a $1,200 tax lien. Dem appointee gets protection from the press, and a mild rebuke at best from the rest of the Dem party. Gets high level gov't position.
- Dem presidential candidate promises a new high standard for inclusion in his administration. Tosses promise aside along with dozens of others. Gets elected POTUS.
In the words of the ever-eloquent Kos: screw him.
Another double standard:
- people are screaming about Geithners tax evasion.
- same people do not report or pay the state use tax required (in some states) for internet or out-of-state purchases.
Just about every commenter agrees Mr. Geithner did not make an "honest mistake."
Some think the mistake does not disqualify him from being Secretary of the Treasury. Yes, it does. The Treasury Secretary supervises the Internal Revenue Service, the agency Mr. Geithner clearly dispises.
- same people do not report or pay the state use tax required (in some states) for internet or out-of-state purchases.
I expect it to come up in my Treasury Secretary Confirmation Hearing.
Furthermore, I expect the President who wants to raise my taxes to be "fair" and asked when selfishness became a virtue to defend me.
However it happened, it gives a flying start to the campaign to simplify the Tax Code. That is what matters.
- same people do not report or pay the state use tax required (in some states) for internet or out-of-state purchases
TurboTax didn't catch the error...
To those who think intentionally not paying your taxes is no bar to becoming Treasury Secretary, what say you about perjury?
The Washington Post's Web site has a PDF of pertinent documents, such as Mr. Geithner's W-2's and the quarterly statements that he received from the IMF.
The IMF statements show that he was advised that his pay was being grossed up for Social Security taxes and the amount of the gross-up. The W-2's properly showed no FICA wages. TurboTax presumably had no objections to entering compensation income with no corresponding FICA wages, because that isn't an uncommon situation. (Other examples are deferred compensation and clergmen's salaries.)
An innocent explanation is available for Mr. Geithner's oversight: He entered his IMF salary on line 7 of Form 1040, couldn't figure out how to report the Social Security taxes (on Schedule SE), and finally threw up his hands and decided it wasn't worth the bother. I can imagine that happening. I've had clients who have done things just as silly in similar circumstances.
Since I'm not a Senator, it doesn't matter whether I think this kind of innocent mistake is consistent with the ability to carry out the duties of the Secretary of the Treasury. I do know that the financial markets are less forgiving of careless errors than the IRS.
A different article in National Review explained that not only did Geithner not pay the taxes he owed, but he filed for reimbursement with the IMF for the taxes he didn't pay.
I don't know if that's true or not, but if it is, it calls for extreme skepticism of the "honest mistake" defense.
I use Turbotax ever year and am intimately familiar with it, 1099s, and W-2s.
It is inconceivable to me that he inadvertantly made this "simple" error year after year after year after year.
He was advised by the IMF EVERY YEAR about this, and signed a paper to that effect. He got a SEPARATE PAYMENT to cover the taxes.
Turbotax has a search function, for God's sake, to look up any possible keyword. Or Google the damn thing. Trivial.
He still didn't explain adequately the two years he didn't fess up to originally. And the thing about summer camp is a joke. Child-care deduction for sleep-away camp?
But if he wants to claim absolute incompetence, I could maybe buy that. Except then he should be running a hot dog stand somewhere, not the Treasury Department.
And "ignorance of the law is no excuse."
Unless you are a Democrat.
It's gonna be a long four years of incompetence, thievery, corruption, and arrogance from these clowns.
I used Turbo Tax every yera to success. I have a full-time job, a part time job that I get a 1099 for, mortgage interest, child care expenses, etc. I have had zero problems with Turbo Tax. The only time I ever had a problem is when I made a typo on the income of a part-time job I had. The IRS sent me a bill for $40 or so, I paid it, and that was the end of it. My fault and my fault alone.
Geithner did exactly what the rest of us do every chance we get, which is to avoid paying the IRS. He got caught. All the BS in the world isn't going to change my mind.
Geithner used TurboTax?
Now I KNOW he deliberately avoided paying those taxes. I did some contracting work on the side last year, and so had to pay all the usual self-employment taxes. TurboTax made it crystal clear that I needed to pay those taxes, and how much I needed to pay. TurboTax isn't perfect, but there's no way a self-employed person can use it and finish thinking they don't need to pay self-employment taxes.
On top of that, Geithner was reportedly told by his employer that he'd need to pay the tax. His story stinks to high heaven.
Well, which is it. Do you get a 1099 or a W2 from the IMF?
If you get a 1099, TurboTax can handle that and compute the Self Employment tax and figure out that formula for figuring out the amount.
If you get a W2 along with a warning, shouldn't the IMF be reporting such employee compensation on a 1099? Is it legal to file W2's as the information return without holding back the FICA?
On the other hand, I've never worked for the IMF, and I don't know what sort of forms they hand people. And having spent sixteen hours doing my taxes last year--me, with no mortgage or depreciating assets, much less exotic tax-free financial instruments--I'm not willing to say that it couldn't have been simple human error.
Garbage. I had income from a foreign employer for work done in the US while I was a US resident. Foreign employer didn't withhold taxes
or pay FICA. It wasn't hard to figure out that I had to pay SECA taxes. There's an entire document on the IRS website about it. (And my foreign employer knew nothing at all about US tax law. The IMF told Geithner every year that it wasn't paying FICA, so he had to.)
It probably would be if they gave me a pamphlet on the subject and also increased my take-home to cover the tax I was supposed to be paying myself. Especially if I was a financial type.
Assuming you'd read it. I get all kinds of things in the mail I don't read because they don't look important. I'm not normally inclined to give people like Geithner a break on financial stuff, but people do make mistakes and oversights.
As far as not paying for the previous two years goes, I probably wouldn't have either. When the IRS finds you've underpaid they always tack on fees and interest, so I'd be surprised if what he paid didn't cover what he should have paid over the entire four years.
The nanny thing is a bit more troubling. I don't see how that could have been an honest mistake.
Geithner, if he is to be believed, thought Turbo Tax included the social security tax in with the total tax payable. (Which Turbo Tax would have done had he completed Schedule SE.) I find that explanation plausible. What's less plausible is that Geithner thought he'd included the social security taxes in his quarterly estimated tax payments. Did he use Turbot Tax for those filings, too?
To me, this is the larger issue. Geithner is, by all accounts, a very smart guy. I believe he thought he was too smart to need to read the instructions. That might be okay when you're trying to assemble your kid's new bicycle Christmas Eve. It's NOT okay when your ego prevents you from admitting that you don't know what you need to know to do an important job. That's a bad character flaw to have in a Treasury Secretary at this time.
What nanny problem are you referring to? It's been reported that one of his domestic workers (nanny?) was in the country illegally. For that, I'm willing to cut him a whole lot of slack. He verified that she was able to work for him legally when he hired her. More than a year later (IIRC), her work permit expired. I don't think it should be up to Geithner to make sure his domestic help have kept their paperwork up to date. My employer made a photo copy of my drivers license on the date I was hired. Since then, they've never asked to see whether it's expired or not.Did he use Turbot Tax for those filings, too?
Crap, they're taxing halibut now, too. No wonder it's too complicated for the Treasury Secretary.
(Snark aside, it's kind of nice to hear from an actual tax lawyer. Amazing how much more one can learn from people who know the subject.)
However, if you're going to take on the responsibility to prepare your own return, shouldn't you bother to read the materials included with your W-2?
Do we know that for sure? Included in the same envelop, not as a separate mailing around the same time period? If it was in with the W-2 he's got a lot less wiggle room.
What nanny problem are you referring to?
I had heard he had nanny problems "like Zoe Baird", which I took to mean he hadn't paid social security taxes for his nanny. If he just didn't keep current on her documentation that doesn't seem like a big deal to me.
I work for an international organization and we get the same paycheck like those from the IMF. I also use turbotax to do my taxes since 2000 and the software always instructed me to pay all these taxes. Do not forget that Geirtner also took as dependent tax deduction his children summer overnight camp, something that the IRS clearly says it is a no-no and turbo tax specifically questions about-I know because I send my children to camps as well.
My old professor in a public administration course, Mike Dukakis, had specifically told us numerous times, that we should NEVER hire for a public position a person who has cheated on his tax return because it shows his moral character and it is an indicator that he would not hesitate to engage in less than kosher acts. But ofcourse this is the most ethical administration. I forgot that taxes are only for us, the commoners. It appears that the princess of Camelot also did not pay her taxes as well.
The only thing funnier than watching the TurboTax exec try to avoid calling the new Treasury Sec an idiot or a tax cheat will be watching the media come up with new and exciting ways to rationalize behavior that they would vilify were someone not of their own party to engage in it.
Cheating on your taxes is the American way. It is one of the principles on which the country was founded. But if one seeks to evince that they support this particular type of tyranny it would behoove them not to be so obvious in how they go about cutting their own tax breaks.
So far Obama has had more corruption in his nominees than Bush had in his administration. We have already seen at least one nominee have to remove his name from consideration due to corruption charges and if there were any moral standard to which the left would adhere to with any consistency, Geithner would be joining him.
Do we really know if Geithner got a 1099 or a W-2? It makes a difference on Turbo Tax, yes, but I was under the impression that international organisations, like foreign embassies, are exempt from tax reporting, withholding and other obligations to the US government, and just gave the employees in the US general wage information to help them self-report. There was something of a scandal about this a couple of years ago when the IRS figured out that a number of US employees of foreign embassies in NY and DC were not paying taxes on their income, and they had an amnesty period on it.
Can someone confirm what the IMF does?
We do know that Mr. Geithner got a W-2, not a 1099. We also know that the box on the W-2 labeled "Social Security wages" was blank, and the box on the W-2 labeled "Medicare wages" was also blank. This was correct because although Mr. Geithner was an employee of the IMF (and therefore the IMF had to provide him with a W-2), a special provision in the tax code, 1402(c)(2)(C) made him, by law, self-employed for the purposes of social security and medicare taxes only. He does not get a 1099 form at tax time to remind him of this fact.
In the same section of the tax code, 1402(e), ordained ministers are treated in the same way. As an employee of a congregation, he or she gets a W-2 form, but the same boxes are left blank as on Mr. Geithner's W-2. The minister then has to pay his or her own SECA taxes. I'm a church treasurer and our denomination requires the congregation to pay the minister a SECA Allowance equal to about one-half of the SECA taxes due. The SECA Allowance, unlike employer FICA payments, is itself subject to both income taxes and SECA taxes. The same was true of the allowance received by Mr. Geithner.
"I'm a tax professional. My software would have caught the error; "consumer grade" software would not." I don't know about Turbo Tax, but every year Taxcut asks me whether I might need to pay self-employment taxes. I don't, but if I had just entered a W2 with zeros everywhere but the wages, I think I would have wondered if I needed to. Not to mention if my employer sent me materials about how to file those taxes, and I had put in for a boost in my pay in compensation for paying them. And I'm just an engineer, not an economics expert that ought to know about taxes.
So I have no doubt at all that Geithner didn't make an honest mistake, he deliberately avoided those taxes and hoped the IRS wouldn't catch him. And it almost worked - by the time they did catch the omission, the first two years were past the statute of limitations. But probably the penalties on the other two years more than made up for it.
OTOH... "Some think the mistake does not disqualify him from being Secretary of the Treasury. Yes, it does. The Treasury Secretary supervises the Internal Revenue Service, the agency Mr. Geithner clearly dispises." Some of us might prefer the Infernal Revenue Service under the supervision of someone who despises it.
Now if we can just get Ted Nugent appointed head of the BATF... Nah, not going to happen with Democrats.
I cannot blame Chester White above for thinking we will see more of the same. In national elections I have always voted Democrat. I still believe Obama will do a better job than McCain would have. Yet I am deeply embarrassed at Obama's and certain Senate Dems' support of this crook.
Not to be overlooked is that Mr. Obama's mother worked with Geithner.
Hats off to big-name Democratic senators Feingold, Byrd, and Harkin for voting against Geithner.
Not even any penalties? Then why on earth should I not counsel people not to pay their SE taxes until caught, and then, if the IRS tries to impose more than interest, argue that their boss, Master Timothy of the Elite Phony Class, paid only interest?