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What Does Glenn Beck Have in Common with Geithner, Killefer, Daschle, Sebelius and Kirk?

January 9, 2010 · 11 comments

In 2009, we had “Geithner-gate”: a string of Obama nominees, including the head of money matters for the country, who were flagged for tax errors, inaccuracies and flat out failing to report income.

Treasury Secretary Timothy Geithner failed to timely pay $34,000 in taxes, citing confusion about his independent contractor status. Geithner ultimately blamed TurboTax for the error, said he was sorry, and was confirmed as Treasury Secretary.

Health and Human Services Secretary Kathleen Sebelius likewise announced that she made “unintentional errors” on her tax returns. Prior to her confirmation, she corrected three years of tax returns and paid more than $7,000 in back taxes.

The prior nominee for Health and Services Secretary, Tom Daschle, did not fare so well. The former Senator from South Dakota failed to disclose more than $325,000 in reportable income and eventually paid an additional $128,203 in federal income taxes, plus $11,964 in interest.

Ron Kirk, Obama’s nomination for U.S. Trade Representative, owed an estimated $10,000 in back taxes at one point. White House spokesman Ben LaBolt referred to the obligations as “a few minor issues.” He was eventually confirmed.

Nancy Killefer withdrew her nomination to become chief performance officer in the Obama administration citing “unspecified tax issues.” Those tax issues turned out to be a $946.69 tax lien on Killefer’s home relating to a failure to pay unemployment compensation tax on household help. The lien was paid off five months after it was filed.

And so it went.

Obama’s administration was blasted from the right and left alike for the embarrassments. Top tax professionals, finance leaders and members of the taxpaying public wondered aloud how so many could get it so wrong. Journalists and bloggers, myself included, alike took to the airwaves, internet and newspapers to decry the failures to timely pay taxes. None were so vocal as Glenn Beck, the widely popular Fox News personality, who referred to the failures as “a culture of corruption among some of the left.” He mocked the excuses of Obama’s nominees, labeling them “tax cheats.”

Beck is the founder and CEO of Mercury Radio Arts, a highly successful multi-media production company, which touts, among other things radio, books and a web site. In 2009, Beck’s Mercury Radio Arts grossed $23 million in revenue. Not bad for… a tax cheat?

It turns out that Mercury Radio Arts has committed a few tax errors of its own. The company has previously fallen behind on New York City business income taxes and has been cited for filing errors in two states. In 2007, the company was penalized $10,927.49 for overdue 2006 New York corporation taxes and was later cited for failing to carry worker’s compensation insurance. In 2008, the company used the wrong tax form in Texas, resulting in compliance issues. All three cases were eventually resolved.

To be fair, Mercury Radio Arts’ tax issues were relatively minor and were resolved fairly timely – much like Killefer and Sebelius (I’ll admit that I don’t think there’s any excuse for Daschle).

But perhaps if Beck publicly addressed his own issues for what they are, there could be a positive spin on this. Maybe it could be a talking point about how complicated our tax system has become and how difficult it can be to navigate the system. Killefer and Mercury Radio Arts both ran up against compensation issues related to their employees, a mistake that even accountants make. Geithner faced a rather complicated reporting scheme because of his employment status at the IMF. And Sebelius’ biggest error, like Mercury Radio Arts and its New York workers’ compensation issue, was related to documentation.

It’s easy to point fingers. Beck happens to do it for a living – it’s what made him famous. He has said of the Obama nominees, “I finally found out why liberals don’t mind taxes — they ain’t paying them.”

Notwithstanding whether those mistakes make them fit for office, ultimately each of Geithner, Killefer, Daschle, Sebelius and Kirk acknowledged their tax mistakes and paid any resulting taxes owed – as did Beck’s company. Does that make them all tax cheats, Beck included? I don’t think it does. Perhaps, it simply makes them human.

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{ 10 comments… read them below or add one }

1 Investor Junkie January 9, 2010 at 2:53 pm

Hi TaxGirl!

Two comments to the article:
1. Beck is a private citizen, not a public official. He isn’t writing the tax policies unlike Rangel. It’s do as I say, not as I do. If a private citizen were to do some of the things our public officials have they would be either fined heavily, in jail or both!
2. I think it can be summed up by BOTH public and private people how stupidly complex our tax system is… Heck, even our own IRS can’t get out the proper tax info. Time for a flat tax. It will NEVER happen, but I can dream can’t I?

2 Kelly January 9, 2010 at 3:12 pm

I agree that there is a difference between fitness for office and being a private citizen. My point isn’t whether what Geithner et al did makes them fit for public office – you can read my posts about those folks and see where I stand pretty quickly.

I think you can be critical of the system and not necessarily make the jump that everyone who makes a mistake is a tax cheat. I’ll bet you that Beck doesn’t think he’s a cheat. And I’ll bet you that Sebelius doesn’t think she’s a cheat. That’s not to say I believe that everyone who owes taxes is simply misunderstood either; there are a lot of instances where the “mistakes” are very purposeful. I’ve seen both in my line of work. It’s just interesting how quick Beck was to jump to the conclusion that none of these people wanted to pay taxes – I don’t think that’s a fair (or balanced) statement. Perhaps, really just perhaps, some of them genuinely made a mistake. I think that can get lost in a world of absolutes.

And you’ll notice that I left Rangel out of this discussion. He’s a whole other issue (*rolling my eyes*).

3 Ralph Lee January 9, 2010 at 4:58 pm

@Investor Junkie: Beck is definitely a public figure, is compensated well for doing so by Fox, and is not immune to scrutiny. I think he is more influential than and high-profile than everyone mentioned in the post, except for Geithner.

@Kelly: smiled at the (or balanced).

4 MommyNamedApril January 9, 2010 at 7:12 pm

I’m an attorney AND I hire a tax professional every year and I still have major anxiety that I’m doing something wrong and will eventually get in trouble. ACK. It’s way too complicated.

5 Investor Junkie January 9, 2010 at 9:31 pm

Kelly,

Love or hate Beck you can say this… I can assure you his taxes and anything related to him is checked, double checked and triple checked. I can assure you people in our government are looking for any ways to say “gotcha”. When you ruffle that many feathers you have enemies looking at your every move. It sounds like the errors were minor and in fact had similar ones in my business.

In fact my lovely NYS government hit my business up for $50.00 something I didn’t even owe. My accountant’s answer we should just pay it off as the amount of work required for him to get it resolved would cost me more.

6 Investor Junkie January 9, 2010 at 10:00 pm

@Ralph Lee: While he MAY be a public figure, he’s not a public official. Big difference! What Beck spews is a matter of opinion, you may not agree with what he says, so be it! You can choose to ignore him. With a public official that creates laws, try ignoring those laws! A public official MUST (at least IMHO) adhere to a higher standard, since they are the ones creating the laws WE must follow.

7 BamBam January 10, 2010 at 8:24 am

Is the question now that if Geithner, Killefer, Daschle, Sebelius and Kirk had not gotten thier positions would they have acknowledged their tax mistakes and paid?

8 Kelly January 10, 2010 at 10:20 am

Some of them had… See prior blog posts.
And for those that had not, while I agree that it’s not okay, how many taxpayers proactively look for mistakes on past returns? Most of these mistakes were revealed at internal audits, not IRS audits.

9 Jack ...of all trades January 11, 2010 at 2:05 pm

The issue Beck (& others) get so outraged about… is the INTENT of so many (extremely high up) government employees. It’s one thing to misinterpret IRS regulations. It’s another to INTENTIONALLY avoid them.

My memory of seeing Geithner testifying before Congress is that he claimed the software made the “error”… but it was made clear (by the questioner) that the software he used did INDEED ask for the “disputed income” he didn’t bother to put down. Simply, he lied to Congress to cover up an intentional illegal act. I don’t see any comparison to Beck, who I highly doubt did his newly formed corporation’s taxes himself. LOL!

I still do my own taxes & it takes hundreds of hours over the course of a year. The one time I was cited for not complying, it turns out the IRS WAS WRONG (after a year of “investigation” by IRS (higher up) employees that actually knew the law better than the ones that cited me. So… am “I” a tax scofflaw? In the view of the (often corrupt or lazy) media I could be tarred that way, simply because of the citation… even though I was 100% innocent.

The other thing that so outrages citizens is that when these (crooks) are found out, they rarely even pay interest, let alone get cited or fined etc.

10 Dennis the Menace January 31, 2010 at 12:59 am

This event with Beck is pure b.s. From what I can gather, Beck’s problems are with different states and New York City. Between the states and the feds, the tax structures are deliberately set up to (en)trap people and then go after them down the road. They can pull anyones tax returns and nitpick them to death. While the emphasis is on the tax offender, when are we going to start going after the tax RECIPIENTS? These bums (politicians) think nothing of wasting billions (now trillions). Where is all this missing money handled by the politicians? As your commentors stated, Beck is a private citizen. Those other pols are the ones making the rules. They consider themselves royalty now and above the rules that the “peasants” have to obey. (Rangel being the worst as he’s the head of the thieves making the rules.) Shakespeare never said “kill all the lawyers”. It was “Kill all the LAWMAKERS”. Hmmm.

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