Jan 13th, 2009 at 5:12 pm
Scandal!
So it seems that when Tim Geithner worked at the IMF, his FICA taxes weren’t automatically withheld in the customary way, and consequently he underpaid taxes by tens of thousands of dollars and when the error was pointed out to him he . . . paid back taxes and penalties. What’s more, Chuck Grassley is “raising questions about a housekeeper who worked briefly for Treasury Secretary-nominee Timothy Geithner without proper immigration papers.” I, for one, know that whether or not Geithner once had a housekeeper whose work visa was valid at the time of hiring but expired during the time she was employed by him ought to be the primary focus of our attention as we think about filling key economic jobs amidst a huge crisis.
43 Responses to “Scandal!”
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January 13th, 2009 at 5:17 pm
As someone who makes vastly less money than Geithner, but also doesn’t have FICA taxes withheld, I can attest to the occasional confusion in filing estimated taxes.
January 13th, 2009 at 5:17 pm
Matt,
If you realized that immigrants are the reason for this economic crisis, then you’d also realize the importance of this matter.
January 13th, 2009 at 5:21 pm
Fake Sailer might as well hang it up. It was a worthy effort, but it’s just impossible to out-crazy the genuine article.
January 13th, 2009 at 5:22 pm
I’m not sure trying to rebottle the lightning of Zoe-Baird-had-an-illegal-nanny is going to work 16 years after it first struck.
It’s one thing to replay your greatest hits. It’s another thing for a one-hot-wonder to try to regain success on the back of an out-of-date tune.
January 13th, 2009 at 5:22 pm
By all accounts it’s not going to stop Geithner from getting confirmed – the GOP on the Senate side learned it on December 5. Some reporter just had good sources who decided that now was the time to fuck with the next Treasury Secretary.
January 13th, 2009 at 5:27 pm
Geithner also fed his political enemies into a large garbage shredder. And is reconstituting nukes in his garage. Anthrax, Anthrax!!!
January 13th, 2009 at 5:35 pm
I suspect the same thing happened to an appreciable fraction of new IMF employees at some time.
January 13th, 2009 at 5:41 pm
A pretty good list of appointments has, I recall, been taken down by questions regarding illegally immigrated hired help. Zoe Baird, comes to mind, why I don’t know, odd name I guess.
January 13th, 2009 at 5:50 pm
On the immigration question: given that the nanny subsequently got a green card, odds are that she was temporarily “out of status” — which happens on a fairly regular basis, given the processing backlog and bureaucratic minefield at USCIS.
January 13th, 2009 at 5:50 pm
Speaking of Dave Weigel, I spoke to his editor last week about a topic he has a habit of misleading about; it was like talking to a twenty year veteran of a cult. Do a find on this page for both of those.
As described, the nanny issue sounds like not that big of a deal. In much more important news, it looks like the BHO team is letting the Mexican government write their press releases for them. Either that, or by some miracle, BHO uses the same phrases in support of illegal activity as Mexico’s president. Oh, and it also looks like BHO has signed us up for a new alliance before becoming president and without asking us first. Change ahoy!
January 13th, 2009 at 5:52 pm
it was like talking to a twenty year veteran of a cult.
Takes one to know one, Kelly.
January 13th, 2009 at 5:59 pm
A treasury secretary who doesn’t pay taxes. Sweet. That’s going to go over well with the public. Can we all stop paying our taxes until we’re nominated for a cabinet post? Cause I’ll happily pay them then.
January 13th, 2009 at 6:13 pm
ought to be the primary focus of our attention as we think about filling key economic jobs amidst a huge crisis.
Well, there was once a guy who told a story of having to be good at the small things before being trusted with the big things. Young guy, student of philosophy, ultra-liberal, and Jewish to boot. You’d like him. Except he loved analogies.
January 13th, 2009 at 6:15 pm
I’m with Royce on this one. Also, the NY Times version of the story seems to be different from Matt’s first sentence.
http://thecaucus.blogs.nytimes.com/2009/01/13/geithner-choice-for-treasury-questioned-on-his-tax-returns/?hp
According to the NYT, Geithner did not pay penalties. He also did not pay payroll taxes from 2001 to 2004. When the IRS audited him for 2003 and 2004, he paid those years but not 2001 and 2002. That seems questionable on his part (and probably the IRS as well), since he knew he had the same job and was being taxed in the same way in 2001 and 2002. Only after Obama’s vetters found the same problem in 2001 and 2002 did he pay those taxes (again with no penalties).
January 13th, 2009 at 6:19 pm
Hey you can’t expect a regional Fed Reserve Chairman (or whatever he was) to understand tax withholding, can you? I mean, when you’re busy deregulating large financial enterprises and encouraging the proliferation of credit default swaps, who’s got time for FICA?
January 13th, 2009 at 6:28 pm
It would be nice if here were grilled on why Lehman was allowed to fail. I have yet to hear a thorough explanation on the thinking behind that decision.
January 13th, 2009 at 6:33 pm
Scott,
You make a fair point, except for two things:
1) Geithner’s accountant, in writing, said that he didn’t have to pay FICA taxes. So this truly was an honest mistake on Geithner’s part, that was corrected rather late.
2) The IRS had such a large problem with FICA taxes for employees of embassies and NGOs that it offered an amnesty for them a couple years later, and only required back taxes for the previous three years.
And one more thing about Calderon’s comment:
It’s not uncommon at all for the IRS to settle back taxes for less than what they’re actually owed; saves on litigation costs. So no penalties were paid, because that’s part of the deal.
January 13th, 2009 at 6:34 pm
Why can’t these people hire servants who are here legally? Why are they so greedy?
January 13th, 2009 at 6:54 pm
And one more thing about Calderon’s comment:
It’s not uncommon at all for the IRS to settle back taxes for less than what they’re actually owed; saves on litigation costs. So no penalties were paid, because that’s part of the deal.
I’m well aware of that, but look at the end of Matt’s first sentence in his post: “when the error was pointed out to him he . . . paid back taxes and penalties.”
January 13th, 2009 at 6:58 pm
And it turns out the nanny was never out of status, but that her employment authorization expired.
January 13th, 2009 at 7:01 pm
He didn’t pay his back taxes for 2001-2002 until he had to, even though the IRS had pointed out the withholding error for the same job over 2003-2004.
Probably he’s not compulsively honest. Most people aren’t. And don’t they deserve representation?
January 13th, 2009 at 8:41 pm
Fake Sailer and LoneWacko in the same thread!
January 13th, 2009 at 9:15 pm
I misfiled estimated taxes once and paid penalties. Can’t say I felt guilty about it. I’m sure I would have got the nuances if I hadn’t gone back to full-time employment.
But for me the point is not so much that, whether he was in the wrong or not, but the “old news” angle. Not everyone scams the system in good faith, but there can’t be any rationale for going back over his penalties now if he came through promptly and without objecting.
January 13th, 2009 at 9:57 pm
This reminds me of the way maps distort the size of roads and small towns. The text denominating a little town like Intercourse in Pennsylvania takes up almost as much size as Philadelphia. This stuff allows the Usual Schmucks, torture-approving schmucks, to try to grandstand.
January 13th, 2009 at 11:21 pm
“I, for one, know that whether or not Geithner once had a housekeeper whose work visa was valid at the time of hiring but expired during the time she was employed by him ought to be the primary focus of our attention as we think about filling key economic jobs amidst a huge crisis.”
Maybe some Senator will ask about Dick Fuld’s allegation that Geithner turned down Lehman’s request to become a bank holding company (which would have made it eligible for government aid) only to summarily accept similar requests from Morgan Stanley and Goldman Sachs a short time later. It would also be interesting if a Senator asked Geithner for some color on his relationship with his former mentor Bob Rubin and how that may have influenced his actions as New York Fed president.
January 13th, 2009 at 11:28 pm
Way to spin a half-truth, Matt.
January 13th, 2009 at 11:49 pm
This is exactly the reason so many decent, qualified people don’t choose to take part in public service or run for office. They just get dragged through the mud for their effort. The guy made a mistake on his taxes. So have I. Mine was an innocent mistake–it seems his was as well. He did the due diligence & checked his housekeepers status. He didn’t realize when it expired. Can we please move on from this kind of pettiness? And that’s what it is, petty. No one was harmed here, lesson learned.
January 14th, 2009 at 2:05 am
Not usually a good idea for an incoming Treasury Secretary to have a tax evasion issue. Glad it’s been largely resolved (albeit a bit later than I’d feel comfortable with). In the end, not a big deal. But one can’t help but recognize the silly irony of this… “incoming Treasury secretary with underpaid taxes to…. U.S. treasury…” Cleary a common oversight many of self-employeed red-taped-buried folk have temporarily experienced. Just not one we expect from an incoming Treasury Secretary. Just sayin’. Not a problem from the left (myself included) given his subsequent repayments and his surperb qualifications, but watch out for the vultures. The nanny thing is something else and quite simply hot air and worthless. PE Transition needs to tame this all down now, get rid of it. Make it for what it is, an untimely faux pa that distracts from a much bigger issue of economic stabilitization. Otherwise, let it go. Waste for GOP, annoying for Dems, worthless to everyone else. It’s not a “real” problem for Obama or the country.
January 14th, 2009 at 3:01 am
You appear to have fked that up.
Your first sentence suggests someone else might be a kooky nutcase for their position on an issue. Your second sentence suggests that issue is your support for the Great Obama Birth Certificate Scandal of ‘08.
You wanna have a 2nd attempt at that link, or was that actually what you intended to post ?
January 14th, 2009 at 4:22 am
is it really that difficult to find qualified people who don’t
have housekeepers/nannies or tax problems. Maybe it was an honest mistake but the fact he didn’t pony up for all the missed payments until well after the fact and only because the O team told him too doesn’t inspire confidence. but my accountant said it was okay is often used by tax cheats to explain away illegal tax shelters and other chicanery
January 14th, 2009 at 5:16 am
31: Well, the whole idea is that you don’t have to pay taxes unless the law says you do. So if you can find a loophole, it’s acceptable to use it. What qualifies as a loophole? Well that’s where accountants come into play. If your accountant or attorney says that it’s okay, it means, for your purposes, it’s okay until the IRS says otherwise. Yes, this means people use their accountant to get away with chicanery sometimes, but that is actually acceptable with the laws we currently have in place.
January 14th, 2009 at 6:36 am
Matt, were you saying the same thing about Linda Chavez at Labor when our country was being invaded by ‘dem brown people from Mehicko? You are a left-wing hypocrite nutjob.
January 14th, 2009 at 7:44 am
There’s something about this story that doesn’t pass the smell test. AFAIK, all employers are required to furnish their employees with a 1099 from at the end of each calender year which notes the amount paid and the amount of income tax withheld, among other things. If Mr. Gaithner had received a 1099, he would have known that income tax was not being withheld. If he did not receive such a form, how did he know how much he made and what his tax liability was?
January 14th, 2009 at 12:15 pm
I think this whole issue speaks to the complexity of the tax system. I a person with the qualifications of young Tim can honestly miss paying over $30k in taxes what is the average joe to do.
As a self preparer I feel for the nominee but he should have asked for advice. I can’t believe that the self employment tax thing wasn’t “water cooler conversation” among the American employees of the IMF. But what the hell, I’ll take his word for it.
Given the position he will be taking, he has made IRS auditors jobs alot harder.
January 14th, 2009 at 12:36 pm
As a self preparer I feel for the nominee but he should have asked for advice.
He did, and was given written professional advice that he had paid all necessary taxes. Which he did — he just didn’t realize it was also his direct responsibility to pay his employer’s tax contribution on his behalf.
AFAIK, all employers are required to furnish their employees with a 1099…
No, not for overseas jobs, which renders the rest of your point completely moot.
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