Saturday, January 31, 2009
Secretary of Health and Human Services nominee Tom Daschle has an even bigger tax problem than Treasury Secretary Timothy Geithner: Daschle paid more than $140,000 in taxes and interest on January 2, 2009 for three tax mistakes he made on his 2005-2007 tax returns comprising over $350,000 of omitted income and overstated deductions that were uncovered in the vetting process:
- Failing to report over $255,000 of income from the free use of a car and chauffer provided to him in 2005-2007 by InterMedia Partners, a private equity fund and its managing partner, Leo Hindery, Jr., a prominent Democratic fund-raiser.
- Failing to report over $80,000 of consulting income from the same source in 2007.
- Failing to properly substantiate $15,000 of charitable deductions in 2005-2007.
The Senate Finance Committee staff also notes that there are two unresolved tax issues:
- Free travel and entertainment services provided to the Daschles by EduCap, Inc., Catherine B. Reynolds Foundation, Academy Achievement, and Loan to Learn.
- Additional unsubstantiated charitable contributions for 2005-2007.
Documents and media and blogosphere coverage:
Update #1: Several commenters have questioned why Mr. Daschle did not have to pay any penalties for his tax transgression. Perhaps he used the Steve Martin defense or he merely anticipated enactment of the Rangel Rule.
Update #2: Scrappleface (via InstaPundit) notes that this is part of President Obama's strategy to close the tax gap:
In office less than two weeks, President Barack Obama has already increased tax receipts at the U.S. Treasury with an innovative plan to get tax-dodgers to pay up, in full, immediately.
“The president’s plan is simple but ingenious,” said White House spokesman Robert Gibbs, “He targets wealthy individuals who filed inaccurate tax forms, cheating the government out of tens of thousands of dollars. Then he just nominates them for cabinet positions. They suddenly see the error of their ways, and they cut checks for the full amount owed, plus interest.”