Taxing situation

It remains to be seen whether Treasury Secretary-designate Timothy Geithner’s failure to pay self-employment taxes for a number of years while employed by the International Monetary Fund might trouble his nomination. President-elect Barack Obama calls Geithner’s tax problem an honest mistake and says he should be confirmed nonetheless. Geithner didn’t pay self-employment taxes from 2001-2004. After an IRS audit he paid his 2003 and 2004 obligations. After his nomination to head Treasury, Geithner paid the taxes for 2001 and 2002. The total, including interest, was nearly $43,000. Meanwhile, Bryon York of National Review Online reports that while Geithner wasn’t paying his self-employment taxes he was receiving tax compensation from IMF. IMF employees are expected to pay taxes out of their own pockets, but then it gives them an extra allowance to cover those tax payments, York writes. Most Americans would like to think their Treasury secretary knows tax law and pays his share like everyone else. Geithner’s tax shortcomings should make for a lively confirmation hearing.

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