Treasury Secretary-designate Timothy Geithner admitted owing more than $34,000 in self-employment taxes between 2001 and 2004.
The Senate Finance Committee released documents showing that Geithner recently filed amended tax returns for those and other years after he had miscalculated his self-employment taxes for work he did for the International Monetary Fund. The documents also showed that Geithner had employed a housekeeper who was illegally working in the United States for three-and-a-half months in 2005.
On Dec. 5, 2008, President-elect Barack Obama’s transition team met with the Finance Committee staff and disclosed that Geithner had paid the Internal Revenue Service $34,023 in additional taxes and $8,679 in interest because he had failed to pay self-employment taxes on income earned during 2001 through 2004, much of it from work he did for the IMF.
The IMF does not withhold taxes, and Geithner said he thought it did. If approved as Treasury Secretary, he will be in charge of the Internal Revenue Service.
Senate Finance Committee Chairman Max Baucus, D-Mont., indicated he would support Geithner despite the problems. "I am disappointed in the errors found in Tim Geithner's tax returns and other information, but I am satisfied that Mr. Geithner has taken the steps necessary to fix these problems," he said in a statement. "That's why I intend to move forward as soon as possible with a hearing on his nomination."
The IRS audited Geithner in 2006 for tax years 2003 and 2004, resulting in additional taxes of $12,719 and $2,128, respectively, plus interest of $1,885. The IRS waived penalties for these tax years. Geithner voluntarily amended his tax returns for years 2001 and 2002 after Obama expressed his intent to nominate Geithner to be Treasury Secretary and paid additional taxes of $2,364 and $16,812, respectively, plus interest of $6,794.
Geithner, a president of the Federal Reserve Bank of New York, filed amended tax returns for tax years 2001, 2002, 2004, 2005 and 2006 reporting combined additional taxes and interest of $31,536. For 2001 and 2002, the most substantial adjustments resulted from his failure to pay self-employment taxes on earned income while employed by the IMF.
Geithner previously had agreed to similar adjustments to his self-employment tax for tax years 2003 and 2004 after his returns were examined by the IRS. The IRS waived penalties for those years. The remaining adjustments on the amended returns resulted from a variety of issues identified during a review of his returns by Finance Committee staff during the nomination process. Geithner self-prepared his original tax returns for years 2000, 2001, 2002 and 2005. He used paid tax preparers to prepare his original tax returns for years 2003, 2004, 2006 and 2007. He used paid preparers to prepare a 2001 amended return that was filed in July, 2002, and his recently amended returns for years 2001, 2002, 2004, 2005 and 2006. All the returns were filed using married filing jointly filing status.
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