Paul L. Caron
Dean




Friday, September 11, 2009

Home Office Deduction Trips Up Treasury Department Nominee

Lael Wall Street Journal, Tax Inquiry Delays Pick by Obama at Treasury, by Martin Vaughan:

President Barack Obama's nominee for the top international post at the Treasury Department has been sidetracked by a Senate committee's investigation into her personal tax returns.

Lael Brainard, nominated in March as Undersecretary for International Affairs, is the latest Obama appointee to be tripped up by the Senate Finance Committee. Of particular concern is Ms. Brainard's use of a home-office tax deduction, according to people familiar with the inquiry.

The delay in considering her nomination has left empty a treasury position responsible for negotiating with foreign governments as the U.S. gears up for the Group of 20 summit later this month, a meeting expected to focus heavily on financial regulation and economic stimulus programs. It is also reviving questions about whether a rigorous vetting process has gone too far and hobbled the administration. ...

Treasury's top tax policy job also remains vacant after University of Southern California law professor Elizabeth Garrett withdrew her nomination for undisclosed reasons amid vetting by the finance committee. People familiar with the Obama administration thinking say the administration is likely to nominate Michael Mundaca, who is now serving as acting assistant secretary for tax policy, for that post. ...

The delay in Ms. Brainard's nomination is especially noteable because her husband, Kurt Campbell, was confirmed by the Senate on June 25 as Assistant Secretary for East Asian Affairs. If the couple filed a joint return, any errors would be his, too. State Department nominees are under the jurisdiction of the Senate Foreign Relations panel, and they are not subject to Finance Committee vetting. ...

Dean Zerbe, a former investigator for the Finance Committee, said it is not uncommon for questions about home-office deductions to come up with respect to nominees' tax returns. "Any time we saw it, sure, we'd want to know what it is," he said. But he said at most, a discrepancy would lead committee staff to ask the nominee to file an amended return. "Normally, that's not anything that would disqualify somebody," Mr. Zerbe said.

https://taxprof.typepad.com/taxprof_blog/2009/09/home-office.html

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Comments

When making mountains out of mole hills, just remember that the "tax problems" of Attorney General nominees Zoe Baird and Kimba Wood begat the appointment of Janet Reno as Attorney General which begat the Waco disaster which begat the bombing of the federal office building in Oklahoma City ...

Posted by: WD Kebschull | Sep 12, 2009 9:01:29 AM


The fact that so many top Treasure positions remain vacant after this many months into Obama's presidency demonstrates an astounding level of incompetence.

Well you COULD say that but remember that many, many, ... many times Obama's supporters have reminded us that ANY criticism of Obama is an act of "straight up" racism.

Remember:
Under Bush: "Dissent is the highest form of patriotism"
Under Obama: "Dissent is the highest form of racism"

Posted by: Borris | Sep 11, 2009 5:26:59 PM

Glitchus: Thanks for quoting me, but remember that I wasn't just talking about Democrats there . . . .

Posted by: Glenn Reynolds | Sep 11, 2009 4:18:09 PM

Being a wanton tax cheat has never been a disqualification for the democrat party elites. Taxes are for the little people who earn a little too much and are best used (wasted) on increasing our politician's power base.

“The real problem is that we’ve got the worst political class in American history.” –Glenn Reynolds

Posted by: Glitchus | Sep 11, 2009 3:43:10 PM

I'm sure the Treasury people are busy working on problems they inherited...and will still be working on them 4 (or, God forbid, 8) years from now....

Posted by: Jim,MtnViewCA,USA | Sep 11, 2009 3:06:59 PM

"It is also reviving questions about whether a rigorous vetting process has gone too far and hobbled the administration..."
Funniest line I've seen today.
I'm wondering if there is a pre-nomination vetting process, much less a vigorous one.

Posted by: john b | Sep 11, 2009 2:54:35 PM

The fact that so many top Treasure positions remain vacant after this many months into Obama's presidency demonstrates an astounding level of incompetence. It doesn't speak well of the President's managerial skills or organizational priorities, nor does it speak well of the Treasury Secretary's ability to get things done.

Posted by: Paul Lee | Sep 11, 2009 2:10:49 PM

Dr. Kill:
"Truly pathetic. Who are they using to prepare their taxes?"

Probably ACORN. They give great tax advice according to a recent video.
http://biggovernment.com/2009/09/11/washington-dc-acorn-video-child-prostitution-investigation


Posted by: Johnny Ringoes | Sep 11, 2009 2:01:16 PM

Do all the top Democrats fudge on their taxes, or just the ones nominated by Obama. One way to cure the deficit is have them pay up before being nominated.

Posted by: Pay your taxes | Sep 11, 2009 1:59:25 PM

Ease up. If we blocked every Obama appointment simply because they were tax cheats, he wouldn't have any friends to appoint.

Posted by: Woody | Sep 11, 2009 1:28:57 PM

Did she take a home office deduction on only one of her principal residences or all five of them like Charlie Rangel? Inquiring minds want to know?

Posted by: Shr_Nfr | Sep 11, 2009 1:27:31 PM

I've been taking a home office deduction for years - and I make a point of taking photos of the room each year in case an examiner ever asks about it. I emailed one in response to an IRS letter once, and got a phone call to the effect of "gee, you really DO have a home office..."

Posted by: cirby | Sep 11, 2009 1:24:03 PM

These people can't figure out turbo tax and yet they are deemed qualified to administer tax law? When turbo tax asks if you want to see if you qualify for home office deductions, tell it yes and answer the questions (it helps to be honest when answering).

My high school granddaughter uses turbo tax without help. It's nearly idiot proof. What kind of people are we appointing to these high level positions?

Posted by: WALTERC | Sep 11, 2009 1:08:23 PM

Another day, another Tax cheat. So what's new?

Posted by: Smoke_and_Mirrors | Sep 11, 2009 1:04:51 PM

The last person I like is President Obama, who seems to be an incompetent buffoon based on how he's doing so far, and he seems particularly poor at vetting his prospective employees.

But that being said, I see nothing wrong with someone taking a home office deduction, assuming they did in fact work in their home. I would be pretty surprised if there was not a legitimate basis for this deduction and so I'm not sure if I see a problem here, at least not without a lot more evidence. There are a lot of gray areas in the law here, after all.

Remember, few people working and filing tax returns today believe they will be Presidential appointees tomorrow. It seems unfair to use hindsight to judge their actions, unless they were genuinely fraudulent.

D

Posted by: David H Dennis | Sep 11, 2009 1:03:35 PM

Since paying taxes is patriotic, I want to say this woman is a traitor and hates America (so she should get along swimmingly in the Obama administration).

Posted by: Joe Biden's America | Sep 11, 2009 1:01:17 PM

That accountants and attorneys are required to prepare 1040's for the self-employed is another issue. I'm sure you are very proud for your role in this mess.

Posted by: dr kill | Sep 11, 2009 12:45:24 PM

Apparently everyone knows that the old home office deduction raises the IRS red flag except for Obama appointees.

Truly pathetic. Who are they using to prepare their taxes? Too cheap to find a professional? Or too self-absorbed to take professional advice?

Either explanation should send them to the Democrat showers.

Posted by: dr kill | Sep 11, 2009 12:42:34 PM