Secretary of Health and Human Services nominee Kathleen Sebelius became the latest prospective Cabinet member to run afoul of the Tax Code after she admitted to recently paying $7,040 in back taxes and $878 in interest.

Sebelius said the errors were unintentional and were discovered by an accountant who went through her tax returns after she was nominated for the job. The CPA reviewed her 2005, 2006 and 2007 tax returns and corrected the errors by filing amended returns.

The Kansas governor is the second HHS Secretary nominee who has been forced to admit to tax problems. Former Senate Majority Leader Tom Daschle withdrew from consideration after he admitted to owing $140,000 in back taxes and interest (see Daschle Bows Out After Tax Problems).

Sebelius’s errors included three charitable deductions for which she lacked documentation, and a deduction for mortgage interest on a home that she and her husband had already sold. "We continued paying off the loan, including interest we mistakenly believe continued to be deductible mortgage interest," she explained in a letter to the Senate. Sebelius also lacked sufficient documentation for some business expenses.

Senate Finance Committee Chairman Max Baucus, D-Mont., who will preside over Sebelius’s confirmation hearing on Thursday, expressed his support for the nominee. “Congress is going to need a strong partner at the Department of Health and Human Services to achieve comprehensive health reform this year, and we have that partner in Governor Sebelius,” he said in a statement.


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