Yeah, but when they do, the check stub shows that. If it ain’t on there, it seems a simple assumption that it’s not being paid. At that point, a question to your employer’s accountant would seem in order. This guy apparently made no inquiries, or didn’t look at his check stub, or review his tax filings, over four entire fucking years?
IANAL, but I was reading about this in the Wall Street Journal (cite) That said :
When I worked for state government as a 1099 “consultant”, I had withholding on a W-2, even though I wasn’t an official employee, of both state and federal taxes. However, because state employees don’t (or didn’t then, anyway) have federal Social Security taxes withheld, since they are/were covered by the state’s equivalent, we 1099ers got an IRS letter ruling stating that we didn’t have to pay SS taxes either.
My understanding is that Geithner was in somewhat of the same position with the IMF – not an employee but with income tax withholding on a W-2. If he inquired of an accountant whether he had to pay SS tax and was told no, I can see him believing it was correct advice.
He did review his tax filings, with a supposed tax expert, who assured him it was fine. That’s exactly why the law is written so that if you rely upon expert tax advice, the IRS usually holds you blameless.
“pay Social Security and Medicare taxes **as if **they were self-employed”
My Bro is a EA, he assures me this is a complex area and not as simple as one may think. There are several variables and complications he sez.
ETF is correct.
Note that the IRS decided that Geithner owed no penalties.
I’d question the competency of a Treasury Secretary who didn’t know that you have to pay taxes on self-employed earnings. The key here is that he was told by his Accountant which is different then not knowing what the Accountant did.
I would hope that his name would be with drawn.
With out a doubt the cry would be loud if Bush had made this appointment.
I mean oh gee I just forgot to file the forms I planed on it, give me a brreak.
I missed this post the first time through but it’s right on the money. He new damn well he owed back taxes. Once he was audited and didn’t act on the previous years he should have had to pay penalties for not paying the back taxes.
Are you suggesting he should have volunteered to audit himself over and above what the IRS did?
Never mind. Too much of a hijack.
Hell. Yeah. If the IRS audit showed that your accountant was wrong about years 3 and 4, and you know damn well you did the same thing in year 1 and 2, it is dowright fraudulent to ignore it. Now you know you have filed incorrect returns. You don’t have the manufactured “plausible deniability” that your accountant provided. There is a specialty trade in tax accountants too. Something like having the former DA as your defence attorney in a criminal case. They have magical powers. Wink, wink, nod nod. When you leave the IRS, there will be a nice opportunity for you in the private sector, if our “special clients” don’t get slammed.
I actually know two people who work for the Bretton Woods Institutions (World Bank and IMF) in Washington DC.
One of them is a night security guard. My father does his taxes for him. Even he knows he has to pay the employer portion of social security taxes. They tell you this when you start working there. There are thousands of US citizens or residents working for these institutions. This is not really as esoteric as people are claiming it is.
Another works as a contracts administrator (better than a clerical position, but only just). She didn’t pay the employer portion for 10 years (from the early 1990s on). The IRS froze her bank accounts, and siezed her house. They threatened to charge her with criminal fraud. With taxes and penalties she is on track to pay three times the original amount.
It is just another case of one set of rules for the well connected, and another for the rest of us.
We scream when the pubbies get away with murder. But its all good when it is our own side doing it.
Meh, screw that. If I get audited and I’m told I owe such-and-such an amount, I feel no moral obligation to start looking for ways to increase that amount.
Granted, it was a smart move for Geithner to take care of the issue, since his vetting was likely to uncover it anyway and create more problems down the line, but if he wasn’t about to hold a major public office, I see no problem with him keeping his mouth shut. And it doesn’t matter if his annual income was a million or ten thousand.
Huh? The earnings were* not *self-employed.
No, that’s not tha way it works. If the IRS audits you, and they think prior or subsequent years have similar issues and are worth auditing, then they do so. They instruct you NOT to file any admended returns (until the audit is completed), unless they ask you to. He did correctly. In fact those old years were outside the SoL, and were basicly voluntary contributions.
And yet he also never questioned the apparent overpayments of his salary. Your link states that the IMF gave Geithner cash in order to pay the required Social Security and Medicare taxes. He just blindly accepted 3+ years of salary overpayments and tax underpayments. The IRS says it’s a “technicality,” but it sounds to me like willful ignorance. The discrepancies were ignored because they both worked in Geithner’s favor.