Lots of chatter lately about President O'Blama's cabinet picks and their singular apathy toward paying the taxes that the rest of us are expected to cough up.
Treasury Secretary Geithner failed to pay self-employment taxes on consulting income he earned while working with the International Monetary Fund. Apparently, IRS discovered the omission and dinged him for some of it. He didn't voluntarily pay the rest of the oversight ($34,000.00) until the President tapped him for the nomination as Secretary of the Treasury.
Presumably, Secretary Geithner isn't working with a seasonal hire at H&R Block who hadn't heard about that rule. The rest of us have long been aware that a 1099 issued for services rendered to the IMF (or anyone else) is subject to self-employment taxes, which is what social security tax is known as when it is levied upon the self-employed.
Interestingly enough, Secretary Geithner's $34,000.00 check didn't include interest or penalties that would have totaled an additional $17,000.00 (approximately).
For those who don't know, although the IRS sometimes waives penalties for good cause, the IRS *NEVER* waives interest on back taxes. The sole exception is when a taxpayer settles with IRS under the terms of an Offer in Compromise. Keep in mind, however, that the IRS never agrees to an OIC unless it believes there is little chance to collect the full amount.
Once they become aware of back taxes, IRS has ten years to collect. If a commoner has a good job, is aging into her peak earning years, has other assets such as a home, 401(k) (I guess that's a 201(k) these days), stocks, bonds, investments, retirement accounts, rental property, or piles of gold in the basement, the IRS will not settle for cents on the dollar nor will they waive interest on the unpaid tax.
Long way around the barn to say that Texas Congressman John Carter didn't think it was right for public officials to get out of paying penalties and interest that the rest of us had to pay. But instead of agitating for a penalty assessment against the Secretary, John Carter introduced legislation that would ensure that.....
Whole thing here.
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