By Stacie Clifford Kitts, CPA
The announcement of a new financial crimes task force by the Obama administration has inspired a new installment of the DUH Factor.
The DUH Factor is my take on events, or laws (generally tax) that are so obviously absurd that they fall into the DUH category.
Among the reasons why this new task force qualifies for my DUH Factor is Treasury Secretary Timmy Geithner’s involvement. Of all the people who could have been selected to announce a new financial crimes task force, I think Geithner would have been a little lower on my list.
Lets begin with this quirky post Has Properly Paying My Income Tax Prevented Me From Getting A Job In the Obama Administration? In this post, I mention that Geithner did not calculate and pay the proper amount of self-employment taxes on income that he received. The unpaid taxes as it turns out were related to self employment compensation received from the International Monetary Fund (IMF).
Because of Geithner’s tax oops, some interesting legislation is proposed, H.R.4172 or the Geithner Penalty Waiver Act. Here is what has been introduced:
H. R. 4172
To provide the same penalty rate for taxpayers who voluntarily disclose
unreported income from offshore accounts as was afforded Timothy Geithner with
respect to his failure to pay self-employment taxes with respect to his
compensation from the International Monetary Fund.
December 2, 2009
Mr. CARTER (for himself, Mr. WESTMORELAND, and Mr. BURGESS) introduced the
following bill; which was referred to the Committee on Ways and Means
To provide the same penalty rate for taxpayers who voluntarily
disclose unreported income from offshore accounts as was afforded Timothy
Geithner with respect to his failure to pay self-employment taxes with respect
to his compensation from the International Monetary Fund.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled,
SECTION 1. ZERO PENALTY RATE FOR OFFSHORE VOLUNTARY DISCLOSURE PROGRAM.
The penalty assessed under the Internal Revenue Service special voluntary
disclosure program for unreported income from hidden offshore accounts shall not
exceed the penalty imposed with respect to Timothy Geithner’s failure to pay the
tax imposed under section 1401 of the Internal Revenue Code of 1986 on his gross
income derived from employment with the International Monetary Fund.
Now granted, we, the public are not privy to the specifics behind exactly why the penalties were waved. Maybe it was perfectly legit.
But come on, the guy who has inspired “fairness” legislation, because it “appears” that he has received special treatment concerning his financial dealings and the incorrect application of certain tax laws, is probably not the right guy to be introducing a new financial crimes task force. DUH
For some more interesting coverage of this proposed legislation, check out the Wandering Tax Pro’s blog.