On Fri, 30 Jan 2009 17:06:14 -0500, Goomba > wrote:

>Lou Decruss wrote:
>
>> Timothy Geithner is what cracks me up. Biden says paying taxes is
>> patriotic yet the head of the IRS didn't pay his and tried to get away
>> with only paying what wasn't covered by the statute of limitations.
>> You really gotta love all this change.
>>
>> Lou
>>
>He did get away with it. He since paid (hardly voluntarily) to get his
>new gig, but I see nothing about penalties? You and I would be paying
>penalties out the wazoo, yet he gets a pass. Hmmmmmm.. something fishy
>there, I think!

Apparently it is a common mistake. He did pay the employee portion of
his SS and Medicare taxes. What he failed to pay was the employer
portion. While he didn't have to pay any penalty, he did have to pay
interest on the amount owed.

For his self-employed income as a speaker/consultant he did pay both
portions. The problem probably stemmed from the fact that the IMF
issues its employees W-2s instead of 1099s even though they don't pay
the employer portion and don't withold the employee portion. If they
had issued 1099s, it would have been obvious that he would have needed
to file both portions. With a W-2 most people assume that the employer
portion is paid by the employer. There is nothing on a W-2 that even
mentions that there is a matching employer portion that is paid or not.

When audited for 2003-2004 he did pay the amount owed. He did not say
uh-oh and voluntarily pony up the 2001-2002 amount due. Some have said
it was because the statute of limitations had expired; but, as I
remember, once the IRS audits you and finds an error the statute of
limitations no longer applies. They can go back and audit any year.

Should he have gone back and volunteered to pay the employer portion on
the 2001-2002 income when he was audited the first time? Yes.