Geithner’s tax reimbursements for taxes he didn’t pay
Er, Tim, I need to lighten my bus…
A former IMF employee e-mailed me yesterday when news of Obama Treasury Secretary nominee Tim Geithner’s tax troubles came to light.
He wrote:
[H]aving worked at the World Bank/IMF I can tell you that as an American working there, they REIMBURSE you for the self-employment taxes! The idea is that American’s get paid “on par” with all the foreigners i.e. NO taxes are withheld. The compromise is that American’s pay the “self-employment” tax but you get a CHECK from the Bank/IMF to pay them with. When I worked there in the mid-70s the reimbursement was one-half of the total self-employment tax. So I think the standard rate was about 6% and normal self-employment was twice that. The reimbursement was about 9% and you filed a special form with the IRS as a US citizen working for an international organization. The bank gave you the check for the 9% at the end of the year. You did not owe anything above the 9%. I can’t remember all that well but I believe you also got a 1099 for the reimbursement. If you know anybody that works there or the UN or the OAS they can tell you how it works now.
Well, guess what? My reader’s story checks out. And now it has come to light that Geithner did in fact get reimbursements for taxes he didn’t pay.
Byron York has the story:
The tax allowance has turned out to be a key part of the Geithner situation. This is how it worked. IMF employees were expected to pay their taxes out of their own money. But the IMF then gave them an extra allowance, known as a “gross-up,” to cover those tax payments. This was done in the Annual Tax Allowance Request, in which the employee filled out some basic information — marital status, dependent children, etc. — and the IMF then estimated the amount of taxes the employee would owe and gave the employee a corresponding allowance.
At the end of the tax allowance form were the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.” Geithner signed the form. He accepted the allowance payment. He didn’t pay the tax. For several years in a row.
According to an analysis released by the Senate Finance Committee, Geithner “wrote contemporaneous checks to the IRS and the State of Maryland for estimated [income] tax payments” that jibed exactly with his IMF statements. But he didn’t write checks for the self-employment tax allowance. Then, according to the committee analysis, “he filled out, signed and submitted an annual tax allowance request worksheet with the IMF that states, ‘I wish to apply for tax allowance of U.S. Federal and State income taxes and the difference between the “self-employed” and “employed” obligation of the U.S. Social Security tax which I will pay on my Fund income.”
In a conversation today with sources on Capitol Hill who are familiar with the situation, I asked, “Was Geithner made whole for tax payments that he didn’t make?”
“Yes,” one source answered. “He was getting the money. He was being paid a tax allowance to pay him for tax payments that he should have made but had not.”
Is this what Geithner supporter Sen. Orrin Hatch means by “very competent?”
***
Time for the Geithner withdrawal betting pool. My guess? Friday 6:45pm Eastern.
The wheels on the bus go thump, thump, thump…
***
Reader David e-mails:
Michelle,
I just wanted to chime in on the real world application of Tim Geithner’s non-payment of taxes. Most US employees who work abroad usually have a gross up in wages similar to what Geithner got. They get it for the imposition of the income tax of the country they are performing work in. The “crisis of conscience” as it is with Geithner isn’t that he got a gross up. It’s that he received notifications of the tax treatment of the income from his employer and neither he nor his tax advisor (I assume he didn’t prepare his own returns) didn’t question either the documentation IMF gave him or why box 2 and 4 of his W-2 was zero.
As a pretty skilled and experienced tax advisor, I profess to having never heard of the FICA treatment of IMF wages, but I assure you I would have found out when I saw a W-2 with $100k of wages and no FICA withholdings.
See what others have said
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Trackbacks
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- BizzyBlog » Tax ‘Goof’ Update: Geithner Was ‘Reimbursed’ for Amounts He Didn’t Pay; AP Story Buries, Then Deletes
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If he gets “reimbursements” for taxes he didn’t pay doesn’t that then count as extra income?
Bullsheet!
It’s extra income no matter what.
Can Obama find a secretary of the treasury who isn’t a tax cheat? Yes he can! Hope and Change!
Perhaps the Senator needs a vacation…a long vacation…
and they haven’t even started yet.
I receive the same type of reimbursement from my employer. Its absolute horse hockey that he “didn’t know” or “made an honest mistake”.
Hey Tim! It’s a good thing you are not a conservative or a republican or you would have been a speed bump!
I’m honestly surprised by this. I expected it all to end up being some technicality and to blow over in a couple of days.
As much as I dislike Obama’s politics, I’ve been trying to give him the benefit of the doubt. I think I misunderestimated the new lows this administration will fall to.
It also seems he falsely signed legal documents attesting to something he knew to be untrue. This guy should be in front of a judge…not Congress
The real culture of corruption — Democrats are so much more fun.
So does he have to pay taxes on the reimbursement for the taxes he never paid?
This is fraud plain and simple. Knowing that he took reimbursement payments totally blows apart his whole “innocent oversight” claim.
When I receive ‘odd ball’ income, I go and find out which forms to use. He either is not that sharp or just did not care if his tax form was completed properly.
Being as he is the CURRENT president of the federal reserve bank in New York, I tend to believe he knew exactly what he was doing.
In my opinion, he should be removed from that post immediatly.
But, being the choice of the chosen one, I suspect he will be joyously confirmed as the only qualified individual, never mind the questionable ethics, to put in charge of the federal cookie jar!
I sent this link and story to Sen. DeMint. Letters to your Senators, guys. They need to know that this matters.
Rush had the media babblehead montage today where they all read the scripted “honest mistake” nonsense.
Estimated time of departure for Timmy: 5pm Friday afternoon.
Well, he may be a crook, but he did preside over the melt-down of Citi as chairman of the New York Fed, so he’s clearly qualified to preside over the meltdown of the whole country.
Sounds like the perfect person to run a band of cutthroat pirates: the IRS.
Good work, OmightyO!
There would normally be monetary penalties associated with that. Basic percentages based on it all being unreported income. Somewhere between Line 7 and line 21, and totalled into line 22, for those with a 1040 in their hand.
I do love his Steve Martin ‘I forgot’ routine he gave the IRS.
Where can the lowly, law-abiding, tax-paying, voting American citizen go to sign up for the privilege of receiving tax reimbursements for taxes not paid and the privilege of not paying taxes while retaining a “GET OUT OF IRS FREE!” card?
It should be considered theft; by converting tax payments to personal income. Statute of limitations though…
This was unbelievable at the very start of this. With these latest revelations it has entered the “Twilight Zone” territory. No one can now claim “he forgot” with this new evidence.
Will it matter to ANYONE in Washington, DC? Welcome to the opening chapters of “Hope & Change LLC.”
And they want to put him in a position to oversee the IRS. A tax-cheat in charge of the IRS…only in Ob-Amerika.
The sad news is that Geithner’s tax problems pale to insignificance next to the real and apparent conflicts with the Clinton/SecState nomination.
Neither would be treated this way if any Republican had nominated them. Both are likely to skate since Obamassiah has anointed them.
I bet Blago wishes he could get away with this stuff.
I guess the rules don’t apply to the Chosen few that want to control our lives. You see, they’re just too important to be held responsible for breaking the law. They can’t solve our every problem if they’re sitting in jail or having their assets seized.
And of course, the D.C. crowd sees nothing wrong with it…
Come on people, wake up! We have got to vote all of these clowns out. Say it with me…NO MORE INCUMBENTS!!!!!
Yeah, next time he’s asked about this he’ll reply, “Excuuuuuuse me!”
Has this guy Odumy ever known or associated with anyone that is not tarnished in some way in the eyes of an American loving, peace loving, law abidding citizen?
Ever notice they never forget to file for their returns?
When I made a ‘mistake’ on my taxes, it did not take much time for the IRS to threaten to correct in 14 days or face the penalties. And this guy has the nerve to be nominated for the head of IRS….
The $64,000,000 question is will any Obama nominee not have a shady past? I just don’t ever remember so many nominees of one administration having so many scandals.
We had a mistake in filing a few years back. Basically, we were moving money from one account to another, and hadn’t filed a certain form (showing our big net of $0), so the IRS came looking for a 5-figure amount of taxes and penalties. We didn’t actually owe any money, but the IRS sure noticed that little missing form.
Of course, as soon as we had that matter cleared up, you can bet your britches the VERY next thing we did was file an amended form for the next year, to make certain they didn’t hit us with the same thing.
Perhaps. As it is, this story is dead. As is, unbelievably, the Blago story.
Welcome to your new America.
duh1 is just dumb as a stick.
..insert sound of popcorn munching here…
obama
can ya hear the bus rolling up in the back ground ?
The Joint Forces Command just came out with a warning that Pakistan and Mexico might collapse and yet many people in the US still happily, gloatingly, cavort on their Obummer gravy train. Does anybody care that Mr. Geithner is as dirty as they come? That he’ll be in charge of all monetary policy in this country?
What makes the US any different from Mexico or Pakistan? There is so much passive indifference in both those countries that is already mimicked in the US. I don’t think that Mexico and Pakistan are the only countries liable to collapse.
I used to shake my head and sympathize with my Mexican college buddies who complained about the rampant corruption and crime in their country. It would appear that America is no more immune to such things.
Are they targeting to become the most corrupt administration ever? Richardson, Hilary’s financing, now this…Geez!
Hey,maybe they’ll nominate Charlie Rangel! He’s got experience with the IRS too!!
For the past several years all Americans have received an annual letter from the Social Security Administration which summarizes all of the FICA taxes they have paid. We are all encouraged to review these figures to make sure they are correct.
It sure seems like the zeros that must have been listed for the years that Tim Geithner worked for the IMF would have been a clue to him that something was wrong.
This bum needs to go to jail like the rest of the tax dodgers and cheats. He can be treasury secretary from his jail cell. What a azzhole! These libs think they are so damn smart and better than everyone else and woe unto you if you make one small mistake – they are going to crucify you. The bum probably thinks he shouldn’t have to pay taxes – that is for the little people to do. Just like former National Security head Sandy Burgler – go ahead and steal and destroy National Security documents without a fine or a day in jail. I hate these elitist criminals and its about time they be made to suffer. Why not put Madoff in charge of the Treasury or that azzhole governor of Illinois or the former gov. of New York, or the Mayor of Detroit or Philadelphia. Are there any elected Democrats that are not felons and traitors? NO! BO will make the Clintons look honest.
But it was an “honest” mistake. /rolling eyes
I was initially willing to give this guy the benefit of the doubt. But after learning of this new information, I can see that he probably was not on the up and up, quite intentionally.
SORRY, WE DESERVE BETTER THAN THIS. MUCH, MUCH BETTER!
Altogether now…..
“THAT’S NOT THE GEITHNER I KNEW!”
With who we have running the government today, it looks like he’ll fit right in with everyone. Hatch’s comment, “very competent” is true, but understand competency has been dumb-downed in order to fit in the “proper” politician.
Sigh!
Man, you all and MM just don’t understand! All this minor — MINOR — tax stuff doesn’t totally irrelevant, really!! The point is the man’s just too damn talented and one-of-a-kind for us to lose saving the nation and our homes and jobs by denying him that position just for such picky oversights! Jeese! Petty folks like you all would keep Mussolini from running Amtrak!
James Greenidge
Queens, New York
I don’t know, maybe he’d still be good. He obviously thinks the IRS doesn’t need his money, so maybe not yours too.
Might he be a closet reformist?!
On second thought, probably just a crook…
Professed competency trumps honesty everytime.
hello
Obama’s list of associates just keeps getting more ridiculous. Should we have expected any different after seeing who he hung out before he was elected?
This guy couldn’t get a job at CNN with those back taxes. Remember Joe the Plumber?
If Republicans do not filibuster this selection, they should be publicly shamed right here.
This guy should be thrown under the bus.
On the count of 3. 1…2…
My father worked for many years for the World Bank, which is a sister organization to the IMF. The taxes worked just as you described. The policy of the Bank was that employees were paid at a certain effective rate after taxes. To accomplish this the employee earns his pay rate based on time and grade, and the Bank then pays the taxes the employee owes on that money both in the country where it is earned and in that employee’s home country. So an American and and Englishman working in Washington DC would get the same take home pay, even though their gross pay and tax liabilities might be very different.
It was not that complicated. It was pretty much impossible not to know how the system worked, because they told you over and over again, and you got all these big honkin’ tax reimbursement checks in the mail. It was up to the employee to keep his own records and remit to all the relevant taxing authorities the money owed.
For Tim Geithner to mess this up, he either had to be dishonest or really, really stupid. Either one is not a great recommendation for Treasury Secretary.
Where do the Democrats dig up dirtbags like this . . . probably the same place the Republicans found Hatch and Graham.
Under the Bus Haiku
No, that is not the
Timothy Geithner I knew.
How was I to know?
Chicago ethics trumps all? The PEBO appoints Richardson-being investigated-Geithner prefers not to pay taxes (me too), Miss Hillary-enough said, Eric Holder, Susan Rice and on it goes.There HAS to be a job for Governor Blagojevich and Bernie Maddoff.
Democrats are sure selective in their outrages though aren’t they? The G-D Democrats screamed like stuck pigs over the cost of President Bush’s Inauguration and now plan to spend several times that amount on PEBO’s coronation.
Chicago ethics trumps all. We are in for a rough four years-at least.
“Under the bus?”
I think, not.
What Obama wants, Obama gets… You don’t like it, and I don’t like it.
Would John McCain have appointed a Tax-evader to head the IRS?
I think, not.
File this under: Be Very Careful What You Wish For,….
You know who you are.
Classic Democrat. They are money black holes. If it comes into their posession, it is theirs. Like the knuckleheads in the news this week who got $170,000 erroneously deposited to their checking account. What did they do? They quit their jobs, moved to Florida, and tried to buy a condo. You cannot make this stuff up.
Apparently rules and laws only apply to conservatives… as usual. That is why I am very pessimistic about our future. Socialists now have a stranglehold on America and they won’t let go until the life is choked out of the golden goose. When that happens I guess they will move on to the next mark, if there is one.
In response to the second reader that Michelle quoted, who said, “As a pretty skilled and experienced tax advisor, I profess to having never heard of the FICA treatment of IMF wages, but I assure you I would have found out when I saw a W-2 with $100k of wages and no FICA withholdings.”
According to the IRS, “Compensation for services performed within or outside the United States by an employee or officer (regardless of citizenship or residence) of an international organization is not considered to be wages for Social Security and Medicare tax purposes. For U.S. citizens the income paid for services rendered to an international organization is reportable as self-employment income on their U.S. federal income tax returns, and is subject to self-employment tax to the extent such services are performed within the United States.
So he would not get a W2. He would get a 1099.
Maybe when after he withdraws the nomination, he can get a gig doing a commercial for a tax prep software. “If I had only used TaxPrep Pro, I’d be the Treasury Secretary Of The United States today!”
I could be wrong but i think HIS TAX PROBLEMS WOULD MAKE HIM INELIGABLE TO WORK AT THE IRS!!!
Yet obama wants him to run the place.
Welcome to the most corrupt administration in American history.
This is a fact.
and it just keeps getting better for other appointees… check out this headline from Fox.
Obama Climate Czarina Was Member of Socialist Group’s Environmental Commission
Carol Browner, whose picture is still on SocialistInternational.org, is president-elect’s choice as climate czarina.
What’s the ratio of Obama’s appointees whose records are not tainted by some sort of scandal to those whose records are? I’m thinking it’s about 1 or 2 to 10.
Can you feel the winds of “change” coming? It’s developing into the perfect storm.
Let’s see. We have a Secretary of Treasurery who has not paid taxes, a Secretary of Commerce who is under Federal Investigation, a Secretary of State who has been bought and paid for by China, Saudi Arabia, Kuwait, Korea and African despots, and a President Elect of questionable lineage. Sounds like politics as usual. Who is protecting the American public?
The fact that we have czars and czarinas in our republic’s administration at all indicates that the socialists have already won. This is only making it official.
Well technicaly that would be monarchists since czarswere kings, but I get your point.
the MASTERS OF THE UNIVERSE coming out of acedemia, especially elite ivy walled acedemia, are the same people who brought you the financial crisis of today. fast and loose as wall street traders, bank managers, and political advisors, so let’s make them part of the political sect. to those bush haters, he is a harvard mba, as are most of the wall street “let’s invent derivatives which no one will understand, then we can really lose other people’s money” superstar hedge fund royalty. you know the guys, people who lose 40% of your investment and get a 20million dollar golden parachute. mr paulson and mr geithner both seem cut from this mold. i’m smart enough to be in charge of your money, but i’m too important to pay taxes, but smart enough to seek reimbursement for the taxes i didn’t pay, and probably smart enough to open a swiss account while serving at imf.
He has a “D” by his name, so none of this matters. Move on to a real new story…
…like did your Brittney Spears is moving out of Malibu?
…like did hear that Brittney Spears is moving out of Malibu?
I saw Mitt Romney on Fox this morning. He says, well IF it is just a mistake, that should not stop him.
A Mistake? Now even old Mitt can’t be counted on by anyone with an ounce of common sense.
I would probably agree with consensus much more if the tax code wasn’t such a piece of junk.
However, this doesn’t seem to be the type of financial mistake that a president should tolerate from his chief financial executive.
Geithner incarceration!!.
NO TAXES AND NO PRISON = NO JUSTICE!
TAX CHEAT Geithner for Levenworth Penitentiary.
If this sh*t does become Secretary of Treasury, none of us should pay taxes for the next 4 years. He needs to go to jail like all the other tax cheats.
Orrin Hatch does not know competency from toilet paper. Corruption seems to be everywhere in this Obamaland.
Also now we are hearing that California does not have the money for tax returns. Old druggie Swartzy had run that state into the ground.
Errata
UHHHH, What did we expect, again??
How does any of this help Michelle Obama’s Children?
He’s either a criminal or incompetent. Eitehr way, SHOWSTOPPER.
Meanwhile, Hillary Clinton makes it out of committee on a 16-1 vote.
Shocking. /sarcasm off.
Umm, technically it is just the most corrupt “office of the president-elect” ever! He has a couple of days to straighten everything out — remember, he is the one that is going to straighten out the ocean levels so this tax thing should be cake!
Is this what they call “double dipping”?
The problem with this plan is that most of us pay taxes through our employer which means we don’t pay them, they are taken.
If people actually had to pay those taxes, write a check for them, there would be a revolt!
Just wake me up when it’s over!
I JUST WANT MY COUNTRY BACK!
These Politicians are SO CORRUPT and POMPUS… They dont even use Vaseline ANYMORE!
They just havent PUT THIS GENERATION IN BANKRUPCY… They have RUINED MY KIDS FUTURE! I’m tired of taking it in the shorts! And if ONE PERSON out there says ‘Well, WE CAN GET IT ALL BACK IN 2 YEARS’…. No…NO WE CANT!
Power CORRUPTS… ABSOLUTE POWER, CORRUPTS ABSOLUTELY!