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A Tax-Challenged Treasury Secretary?

Timothy Geithner, nominated to be the next U.S. Treasury Secretary, waited for an IRS audit in 2006 before paying certain taxes he owed. Then, after that audit overlooked he'd failed to pay the same type of tax for earlier years (amounting to tens of thousands of dollars), Geithner waited until he was tapped by the incoming Obama administration before making those payments last November.

The nominee's decisions proved financially savvy - for awhile, anyway. He avoided penalties for his initial underpayment. And he would have escaped paying the second amount altogether, had he (or the president-elect's transition team) not had to consider the public relations consequences.

Is this the type of financial smarts the U.S. government needs to restore the world banking system to health?

Or, does it send the wrong message to place someone who cut corners on his own tax bill atop the department that's responsible for both collecting taxes from U.S. individuals and businesses, and making sure that banks don't play shell games with the taxpayer funds they're receiving in the bailout?

Many banking and asset management jobs require a candidate to have a clean personal tax record. Do you know anyone whose personal tax compliance record hindered or prevented them from being hired for a particular position?

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AUTHOReFinancialCareers News Insider Comment
  • DL
    D Lyons
    21 January 2009

    Whatever his motivation for the omission, it does point out the unreasonable complexity of the US tax code. If the ex-President of the New York Fed, and ex-IMF staffer, and candidate for Secretary of the Treasury can't get his taxes straight and can go several years without detection, how is the average taxpayer (or even an IRS auditor) going to be competent to prepare or verify a 100% accurate tax return. This situation should be an object lesson to the Senate and House to simplify taxes.

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