February 2, 2009 Unfit Geithner Needed A Good CPA Timothy Geithner, Obama’s new Treasury Secretary did not pay Social Security and Medicare taxes for 2001 – 2004 while he worked for the International Monetary Fund. He said it was a mistake. Bah, Humbug! As an American citizen working for the IMF, Geithner was technically considered to be self-employed and was required to pay Social Security and Medicare taxes for himself as both an employer and employee. Additionally, the IMF and World Bank reimburse employees, including U.S. citizens for their US income taxes and make payments on a quarterly basis to cover those liabilities. They do not make contributions toward payroll taxes which individuals are expected to pay on their own. The employees are repeatedly told they are responsible for paying their taxes and are required to sign a statement annually documenting that they have been so informed and understand their obligations. I know this because I have had such employees as clients over the years and have been in the position of calculating the amount of their governmental obligations. Mr. Geithner alleged he sought advice of several "accountants" and the majority said he did not owe the taxes. The IRS audited him in 2006 for the 2003 and 2004 years and disagreed. Ultimately, Geithner owed taxes and interest of $17,230 for those two years. In 2006, he did not fess up and pay for 2001 and 2002. Geithner should not have shopped around until he found the answer he wanted. The Treasury Secretary is responsible for collecting US taxes. Timothy Geithner does not show the requisite character to be in charge of the IRS. He also needs a good CPA. Geithner is lucky that votes on his confirmation came from Senators, and during a financial panic, rather than a jury of his taxpaying peers. WSJ 1/14/09 p.A2, Editorial The Economic Stimulus Bill is a Fraud It will not create jobs. It will spend money that the younger generations of America will have to pay for. Only 15% of the funds will be spent in this year, most over the next 3 - 5 years. It is conceivable that the recovery will be starting by the end of this year obviating the need for most of the bill (except maybe the several hundred million dollars for contraceptives and the half a billion dollars to be sent overseas for abortion counseling!) In brief, this is a plan to transfer money to finance a social system based upon dependency and to keep state and local union employees employed. This bill, however, will exacerbate the inflation we have predicted and we refer you to our November newsletter on how to profit by it. WSJ 1/16/09 p.A2 Obama Nominee Tom Daschle Also Needs A Good CPA Having A Free Car And Driver is not tax free as any Wall Street Executive knows; and so should former Senate Majority Leader Tom Daschle, Obama’s nominee for Secretary of Health and Human Services. Former Senator Tom Daschle failed to report $255,256 in income from 2005 through 2007 for a car and driver supplied to him for his personal use as well as $83,333 in consulting service income that was unreported on his 2007 tax return. Mr. Daschle’s excuse was that he was not provided a Form 1099 and therefore did not have to pay it. We refer him and all others to IRC 61 which states "Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, …………" We also refer him to the standard government statement, "ignorance of the law is no excuse." As we tell clients, the income must be reported even if no 1099 was issued. By the way, he only fessed up to this breach of law after he was nominated by Obama. WSJ 2/2/09 p.A3 As always, if you have any questions about these or any other matters, do not hesitate to call me. Remember, We’re Here For You!!