by Tom Hamburger and Ralph Vartabedian
The Treasury secretary, who oversees the IRS, didn't pay all his taxes. Neither did five other top nominees for the Obama administration, or their spouses.
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Now, as today's tax deadline looms, some Americans are wondering why they should comply with the arcane requirements of the Internal Revenue Service when top administration officials failed to do the same. Even some IRS employees are upset at what they see as a double standard.
The most criticized example has been Treasury Secretary Timothy Geithner, who admitted not paying $34,000 in payroll and Social Security taxes, saying his failure to pay was an oversight. Five other nominees disclosed similar tax issues, including one as recently as two weeks ago when Kathleen Sebelius, President Barack Obama's pick for secretary of health and human services, admitted she didn't pay $7,040.
"Our members are upset and angry," said Colleen Kelley, president of the National Treasury Employees Union, referring to concern bubbling up within the IRS over unusually strict rules that can cost agents their jobs if they make a mistake
See the rest of the story on tax day in Tribune newspapers and here in the Swamp: (Photo of Treasury Secretary Timothy Geithner / AP)
In some cases, IRS employees have lost jobs for simply filing a late return or failing to report a few hundred dollars of interest income.
In an interview Tuesday, Kelley said the Geithner case underlines the need for a change of the rules governing IRS employees.
"My issue is not that I want Geithner or anyone else punished," Kelley said. "I want there to be a re-examination of the law that holds IRS employees to a separate standard: one in which a simple mistake can cost them their jobs with no right of appeal."
Robert Schriebman, a California tax lawyer who has testified before Congress, said his clients are seething over the tough treatment they get from the IRS, while some in the president's Cabinet apparently were able to duck paying their taxes.
"Politically powerful people are less likely to get bothered by the IRS," Schriebman said. "It is more than a question of fairness. Not only is the IRS looking away from confronting influential people, the IRS is getting a lot tougher and nastier toward the little guy."
IRS employees have reported that taxpayers are occasionally citing the Geithner case when they are asked to pay their tax bills. "It's making the compliance conversation harder," Kelley said.
Geithner's $34,000 in unpaid taxes pales in comparison to the more than $128,000 owed by Tom Daschle, Obama's first choice to run health and human services. But Geithner's position overseeing the IRS has made his case particularly galling in the public's mind.
IRS Commissioner Douglas Shulman told reporters Monday that there is no discrimination when it comes to tax enforcement.
"The American people are pretty smart," he said. "They understand that people who are nominated for high office are going to be put under a level of scrutiny. They also understand the tax code is incredibly complex."
Comments
Geithner is certainly setting a fine example for the White House, Obama must be proud of him.
Posted by: Inky | April 15, 2009 9:10 AM
Obama may well have been sold a bill of goods on the Summers-Geithner crowd.
Geithner was supposed to be some kind of wunderkind, like Wolfgang Amadeus Mozart, who could just sit down at the keyboard and improvise a fix for the mess Paulson and Greenspan allowed to happen, indeed, facilitated.
So he could be forgiven something that would get most folk in a lot of trouble.
He signed an explicit acknowledgment that he understood the World Bank was not withholding and he had a personal obligation to pay those taxes.
Conveniently it slipped his mind.
I'm old fashioned. This seems to me like the Marc Rich pardon money that Hillary's brother got, and then, when the public found out about, "gave it back". That says it all about the Clintons, including her brother. If it were honestly earned in the first place, why did he give it back? And as I recall, Hill claimed later she had no idea any of this was happening.
Geither so far has shown no inclination or ability to transcend that Manhattan Masters of the Universe world he's used to living in.
Of course Summers would have been even worse. He was "moonlighting" for a hedge fund while he was supposed to be devoting full time to being President of Harvard, and at the same time trying (ultimately successfully) to run one of the black professors out of the university because he was spending too much time on "extracurricular" pursuits. Of course the faculty engineered Summers' ouster because of other offenses, but, had they known about his moonlighting, that would have been in the indictment as well.
The "public private partnership" scheme Geithner has endorsed, shows how much in thrall he is to the Blankfeins and Paulsons of the world. He'll let them "unbundle" the synthetic securities they helped create, and trust them not to throw all the good ones into their friends' bucket, and the bad into the taxpayers' bucket.
As Elizabeth Warren has pointed out, right now he can't even tell us where the bailout money has gone so far. Why would we believe he can, in future, tell us who got the "good" mortgages and who got the dross?
Posted by: ornery | April 15, 2009 10:04 AM