TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, June 21, 2009

Obama's Pick for State Department Post Failed to File Her 2005 & 2006 Tax Returns; She Blames Her Cardiologist Husband and the Post Office

The New York Times reports that President Obama’s choice as Chief of Protocol for the State Department, Capricia Penavic Marshall (J.D. 1990, Case Western), and her cardiologist husband, failed to file their 2005 and 2006 tax returns.  She balmed the problem "on the Postal Service and on miscommunication between her husband and their accountant":

Ms. Marshall, who was the social secretary in the Clinton White House, notified the Obama administration about the late filings before she was nominated on May 14. She has since provided written answers to questions about the matter from Senator Richard G. Lugar of Indiana, the top Republican on the Foreign Relations Committee, which will hold a hearing on the appointment next Wednesday. The post requires Senate confirmation. ...

Ms. Marshall may fare better because, after ultimately filing the 2005 and 2006 federal and local paperwork, she was entitled to $37,259 in refunds, according to data she provided to Mr. Lugar. ...  An aide to Mrs. Clinton, Philippe Reines, said, “In the end, only two American taxpayers were adversely impacted by this inadvertent lapse.”

In her written answers and in accounts she gave to government officials, Ms. Marshall has said the errors were unintentional. She has said that her husband failed to recognize that the couple’s accountant had included the tax returns for 2005 in a binder he provided with copies of the returns, and that the actual paperwork was never mailed.

The couple learned something was awry, Ms. Marshall has said, when the IRS notified them last fall that their 2006 return had never arrived. She wrote that an agent “advised us that there were a large number of tax returns misplaced by the D.C. post office for the 2006 tax year.”

(Hat Tip: The Tax Lawyer's Blog.)

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Comments

This reminds me of the student who claimed to have slept through his tax exam. The excuse was so improbable, we concluded, that it was probably true. Here also.

Posted by: mike livingston | Jun 21, 2009 8:13:34 AM

What is the due date for 2005 and 2006? Are those returns due now? I thought we had another year.
Goodness, gracious.

Later,

Abe

Posted by: Abe Carnow | Jun 21, 2009 9:25:44 AM

i do not understand how politicians, celebrities, and others in public service always get away with tax evasion, i am pretty sure ms marshall received numerous letters stating her failure to file her taxes for 2 years especially consecutives years. My husband and i mistakeningly omittes an income on our 2007 tax return and oh boy did our wonderful goverment sock in to us. I am sick and tired of these poeple getting away with not knowing about their taxes, it is their responsibility just like it is of the the common folk, i wonder if they get away with paying all the fees and fines?

Posted by: debra c | Jun 21, 2009 10:56:02 AM

Mike,

I'm not so sure sleeping through a tax exam is all that improbable.

In fact, I am told that some of our most potent insomnia medications are made in part from liquified tax code.

Now sleeping through, say, a Jessica Alba exam, that's improbable.

Posted by: peter | Jun 21, 2009 2:25:41 PM

It must be nice to not to miss refunds of almost $40,000!

Posted by: al rudiger | Jun 21, 2009 4:51:51 PM

If you are a Liberal you are excused for stupid mistakes. Conservatives are held to a higher standard because they are assumed to be smart.

Posted by: Dale100ca | Jun 21, 2009 7:11:31 PM

Professor Caron, you are missing the main point here, and mutatis mutandis, it's the same point that made the Clintons' killing in Whitewater OK while they excoriated other people for their greed.

If you're righteous, if promoting yourself and your well-being, will lead to a more progressive world, then it's just nitpicking to fuss about things like sweetheart investment deals or late tax filings. But most of us are sunk in our own self-interest and so it's important that we follow the rules and suffer the consequences if we don't.

Besides, I'm inclined to give some slack to someone named Capricia...cool name, even better than one of the ringleaders in the Duke faculty's attempt at sort of figureative lynching of the lacross players, Wahmina Lubiano.

Capricia...sounds like a Disney villain, doesn't it? "Even as Lilo, Pocohantas, and Pinocchio try to get home, Capricia's minions..."

Posted by: Alex Bensky | Jun 21, 2009 7:15:30 PM

I did not file returns for several years. I did pay estimated taxes. Some years I over paid, some I slightly underpaid. The IRS will send you a letter of reminder for several years befor they do anything. Yes, I can easliy understand how a doctor and wife with large incomes can overpay their estimated taxes by $18,000 a year for each of two years. That only amounts to a miss on guessing the AGI by about $50,000.

It is when you finally do file, add up any penalties, and owe them money that they get angry. Of course, if you overpaid but failed to claim a refund soon enough you will lose that. Sweet.

Posted by: Augustus | Jun 21, 2009 9:48:12 PM

I didn't know there was a balm for tax problems. ;-)

Posted by: CayleyGraph | Jun 22, 2009 3:30:27 AM

I think they're going to be excused because in this case, THE GOVERNMENT OWED THEM MONEY, not vice versa. Remember, the government comes after you if it thinks you owe money (debra c, that was probably your case). The government will NOT say, "hey, we collected too much in taxes from you, here's the check." If there's anything you want to be upset about, be upset about that.

I suppose an interesting question is whether they were assessed any penalties related to their late filing or not.

Posted by: it doesn't matter whom | Jun 22, 2009 5:53:34 AM

This is Obama's choice for Chief of Protocol? What do you think that job would entail? Hmmm...judging by its name I'd say making sure things are done right, on time and (if possible) without offending people. Before you feel too sorry for her, keep in mind that these people don't do their own taxes. Someone else does all the work and keeps them informed, all they have to do is provide the paperwork and sign the forms. So, there's no excuse for not having their taxes filed on time for 2 years in row other than not following proper...uhhum...protocol. My favorite part? She's pointing the finger at other people.

Posted by: Terri K | Jun 22, 2009 8:21:51 AM

What do you want to bet that Ms. Marshall sent in a large payment to apply to 2005 and 2006 only a month or so before they filed the returns to make it look like they had a big refund and to take the heat off?

She forgot to blame Bush.

Posted by: Woody | Jun 22, 2009 9:36:14 AM

i always like the excuse, "i thot my accountant filed them," meaning that as a grown-up adult person, i never realized that my annual tax return requires my own, personal signature, UNDER PENALY OF PERJURY. how can you not know whether or not you signed your own return and dropped it in the mail?

Posted by: hahaha | Jun 22, 2009 10:12:36 AM