Geithner’s failure to pay Social Security and Medicare taxes on his IMF income sounds like a common and honest mistake: Unlike domestic employers, the IMF did not automatically deduct these taxes from his paycheck, but instead gave him extra income with which to pay them himself. He didn’t pay them, however…until a 2006 tax audit revealed the error, at which point he paid the back taxes plus interest for the two years covered by the audit: 2003 and 2004.
When Obama’s team vetted Geithner prior to the nomination, however, they discovered that he had also failed to pay the same taxes based on IMF income in 2001 and 2002. When this was brought to his attention, he immediately paid these taxes, with interest.
And so the question is:
“Tim, when the IRS alerted you to the error in your 2003 and 2004 returns, why didn’t you voluntarily refile your 2001 and 2002 returns and pay those back taxes, too? Because you just forgot that you earned any IMF income in those years? Or because you thought you could scam the government?”
Will Congress try to block Geithner based on this issue? Remains to be seen. But if a confirmation hearing set tomorrow is postponed, Tim Geithner might not be Treasury Secretary when Obama is sworn in.
See Also: Obama Blows Geithner Taxgate Response