Geithner Failed To Pay Self-Employment Taxes
STEVE INSKEEP, host:
Some other news now. President-elect Barack Obama's choice for Treasury secretary has run into a problem. Tim Geithner failed to pay more than $40,000 in taxes over a four-year period. This is the guy who's nominated to oversee the Treasury. He's repaid the money, but the misstep has delayed his confirmation hearing, as NPR's John Ydstie reports.
JOHN YDSTIE: Geithner, who until recently was president of the New York Federal Reserve, met privately yesterday with members of the Senate Finance Committee to explain his tax issues and a minor issue concerning a housekeeper's immigration status. After the meeting, Committee Chair Max Baucus of Montana said, quote, "The errors were not intentional. They were honest mistakes." But a spokesperson for the ranking Republican Senator Charles Grassley of Iowa said the senator believes the issues are serious.
Most of the tax problems occurred while Geithner was employed at the International Monetary Fund from 2001 to 2003. The IMF does not withhold U.S. taxes, as most employers do. It does add the approximate amount of the taxes due to the employee's pay, and then the employee has to forward tax payments on to the IRS. It appears that Geithner forwarded some tax payments, but not others.
For instance, he owed Social Security taxes to the U.S. government. He did forward the employee portion to the IRS, but he did not send the portion of the Social Security tax normally paid by the employer, as he was supposed to do. The IRS audited Geithner for tax years 2003 and 2004 and required him to pay additional taxes and penalties, but Geithner did not amend his 2001 and 2002 tax returns until Obama transition officials discovered the problem. Geithner quickly paid the nearly $26,000 he owed. Republican Orrin Hatch of Utah, who serves on the Finance Committee, said the issue should not jeopardize Geithner's confirmation. John Ydstie, NPR News, Washington.
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