WASHINGTON The U.S. Senate Finance Committee said on Tuesday that Treasury Secretary-nominee Timothy Geithner had recently paid back taxes and interest of $31,536 due in large part to a failure to pay self-employment taxes while he was working at the International Monetary Fund.
The IRS audited Geithner, who is currently president of the New York Federal Reserve Bank, in 2006 for tax years 2003 and 2004, resulting in additional taxes and penalties. However, he did not amend his returns for 2001 and 2002 until after President-elect Barack Obama said he would nominate him to be Treasury secretary.
The committee also said the legal work status of a former household employee had lapsed for a period of 3-1/2 months while she worked for the Geithners.
IMF employees are responsible for meeting their own tax obligations, including federal and state income taxes and self-employment taxes.
Obama's transition team said it was a "common" mistake for IMF employees to miss some tax payments because the IMF, unlike most U.S. employers, does not automatically pay or deduct self-employment taxes on behalf of employees.
According to details released by the Senate Finance Committee, which has jurisdiction over Geithner's nomination, he also amended his tax returns to take into account mistakes made regarding a number of other items, including a penalty for early withdrawals from a retirement plan and a deduction for use of business equipment that had been discontinued.
In addition, an accountant who prepared his 2006 return informed Geithner that he was not permitted to claim payments for overnight camp as dependent care credit, but he did not go back and file amended returns for prior years.
Following are details of Geithner's tax errors:
TAX YEAR TOTAL TAX AND INTEREST
2001 $ 3,320
2004 $ 2,302
(Reporting by Mark Felsenthal and Emily Kaiser)