Now I can accept that a paperwork snafu led to immigration issues for a domestic employee. And I can accept that even the brightest guy can make a tax mistake – those IRS rules are confusing, and the one he broke more than most. But when you get pinged for a violation on one return that you know you made in other years but choose not to correct since you didn’t get caught, doesn’t that raise a serious character issue that needs to be considered?

Timothy Geithner didn't pay Social Security and Medicare taxes for several years while he worked for the International Monetary Fund, and he employed an immigrant housekeeper who briefly lacked proper work papers.

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At the closed-door meeting, Mr. Geithner was contrite, several participants said. He told senators the mistakes weren't intentional, but that he should have known better. The Internal Revenue Service makes up by far the largest piece of the Treasury's budget.

Mr. Geithner declined to comment on any matters as he left the closed-door meeting Tuesday.

The tax issue relates to Mr. Geithner's work for the International Monetary Fund between 2001 and 2004. As an American citizen working for the IMF, Mr. Geithner was technically considered self-employed and was required to pay Social Security and Medicare taxes for himself as both an employer and an employee.

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In 2006, the IRS audited Mr. Geithner's 2003 and 2004 taxes and concluded he owed taxes and interest totaling $17,230, according to documents released by the Senate Finance Committee. The IRS waived the related penalties.
During the vetting of Mr. Geithner late last year, the Obama transition team discovered the nominee had failed to pay the same taxes for 2001 and 2002. "Upon learning of this error on Nov. 21, 2008, Mr. Geithner immediately submitted payment for tax that would have been due in those years, plus interest," a transition aide said. The sum totaled $25,970.

And therein lies the problem – Geithner DID know about the issue after the 2006 audit. He knew that he did his taxes the same way in 2001 and 2002 that he did in the years for which he was audited – but did nothing to correct the problem. THAT is troubling – but whether it is a sufficient question regarding his integrity to merit the denial of confirmation is one we have to consider.

Posted by: Greg at 01:11 PM | Comments (2) | Add Comment
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