SmallBizResource Blog -- Government

Geithner Named Treasury Secretary Despite Tax Fiasco

Posted by Gayle Kesten Tuesday, Jan 27, 2009, 02:30 PM ET

Some people not only fail to pay their taxes and still sleep at night, but one, in particular, is now Secretary of the Treasury.

Yesterday -- ironically the same day I received my first 1099 -- the Senate confirmed Timothy Geithner as head of the federal department that oversees the IRS. Geithner, if you hadn't heard (or maybe you have and just like torturing yourself), just caught up on three years' worth of self-employment taxes on earnings he made while working for the International Money Fund from 2001 to 2004.

Fortunately for Geithner, an apology for his careless but "completely unintentional" oversight, not to mention repayment ($34,000 plus $14,000 of interest), did the trick, though he did partly blame his accountant and tax software.

Maybe his mail carrier screwed up, too. According to The New York Times, "As an international organization, the I.M.F. does not withhold taxes for American employees, though it does provide statements of their estimated liabilities and pays them an amount equal to the employer share of payroll taxes."

Whether Geithner should have been shown the door is moot. In hopes of gleaning a lesson from the controversy (which also involved employment of an illegal immigrant, the Competitive Enterprise Institute issued this statement on the eve of Geithner's confirmation: "Given his own serious breach of the tax laws, which he only corrected completely after being chosen as Treasury Secretary nominee, Geithner should show sympathy with the difficulties of individuals and small businesses in dealing with the complexities of taxes and regulations. New financial regulations from the Treasury Department should be carefully thought out so that they don't hinder small investors and entrepreneurs. If Geithner reflects on and learns from his personal and policy errors, he can be a more effective Treasury Secretary."

As for me, I'm expecting about a half-dozen 1099s in all. My specially labeled manila folder is ready and waiting. In the meantime, I'll amuse myself with this related Steve Martin routine from the '70s, but only after I review the IRS' Small Business and Self-Employed Tax Center.

Government