Nancy Killefer Gets Thrown Under the Tax Bus

February 03, 2009
By 

As you may have heard, a few nominees to positions in the Obama administration have had some tax troubles.

  • Nominee A (Tim Geithner, Treasury) neglected to pay $34,023 in owed self-employment tax over four years.
  • Nominee B (Tom Daschle, HHS) failed to report a substantial part of his income for a number of years, including three years of personal-use car service provided by his employer.  All told he owed $128,203 in back taxes, plus interest, which he paid just last month.
  • Nominee C (Nancy Killefer, "Performance Czar") failed to pay $298 in D.C. unemployment insurance taxes for domestic help, which accrued penalties resulting in a total liability of $947.

These nominees saw consequences in proportion to the magnitude of their errors.  Right?

  • The IRS waived penalties with regard to Nominee A's back taxes. He got confirmed by a 60-34 Senate vote.
  • The IRS waived penalties with regard to Nominee B's back taxes. Obama says he "absolutely" stands behind Nominee B to serve in his designated role.  White House spokesman Robert Gibbs explained Nominee B's tax trouble by noting that—and this is a direct quote—"nobody's perfect."  UPDATE BELOW.
  • Unlucky Nominee C was forced to withdraw, stating that she has "come to realize in the current environment that [her] personal tax issue of D.C. Unemployment tax could be used to create exactly the kind of distraction" that the administration must avoid. She also had to pay penalties in more than double the amount of the taxes she failed to pay.

So, remember kids: if you want to be a high-ranking government official, income tax is optional, but always always always pay your domestic employees' unemployment insurance tax!

UPDATE: Literally minutes after I posted this item, Tom Daschle withdrew as HHS nominee, stating that he "will not be a distraction."  If that's his goal, he may want to get some new glasses.

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