Tuesday, March 3, 2009

Stop Me if You've Heard This One Before

President Barack Obama's nominee as the next U.S. Trade Representative, Ron Kirk, apparently has some tax problems. This is like Mad Libs, Cabinet Appointment Edition. Just plug in the name of the nominee, the position, and the specific tax "oversight."

In this latest incarnation, we have the former Dallas Mayor failing to pay taxes on an honoraria he received for speaking engagements as well as over estimating the amount of business expenses he claimed for Dallas Mavericks basketball tickets and for tax and accounting fees.

In dollar amounts, the taxes he failed to pay were rather small. The Senate Finance Committee, which discovered the tax irregularities during their review of his nomination, estimated that Kirk has paid less than $10,000 total in back taxes.

Still, it does once again call into question the administrations vetting process, the knowledge of the people they are putting into the Cabinet, and the Senate's willingness to give Obama a free pass for pretty much whatever he wants.

At issue was Kirk's failure to pay taxes on $37,750 in speaking fees he then donated to his college alma mater. The problem was, he should first have reported the honoraria as taxable income, paid the taxes on the income, then donated the money and then deducted that as a charitable contribution.

In addition, Kirk, a lawyer, failed to provide adequate details to substantiate that his season tickets to the Mavericks was a business expense. I agree with Norm Lofgren, a partner at Looper Reed & McGraw law firm in Dallas and a former IRS trial attorney, who told The Dallas Morning News that Kirk's oversight "suggests carelessness in his business record-keeping. The question is why. Mayor Kirk is an experienced lawyer who undoubtedly knows the specific substantiation rules for entertainment."

Kirk also owes back taxes for business deductions he over estimated for tax and accounting fees.

Now, Republicans supposedly like Kirk and are looking forward to his swift approval, despite these lapses. But, the last time we overlooked tax errors because a nominee was just too vital, too integral to our country's future we made Timothy Geithner our new Treasury Secretary. And we know how well that has worked out.

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