June 19, 2009

GOOD GRIEF: ANOTHER OBAMA APPOINTEE WITH TAX ISSUES. Pick for Protocol Post Corrects Failure to File Taxes in 2 Years.

I don’t even want to hear anyone in this Administration talk about tax increases, when they can’t seem to staff it with people who have actually, you know, paid their taxes on time. (Via JWF, who’s not buying the excuse for not filing).

UPDATE: “Isn’t it a little remarkable that the IRS didn’t penalize the Marshalls for late returns?” Yes, the way various political bigshots are getting by without penalties that ordinary taxpayers face bears some investigation. It suggests that the IRS is running a two-tier tax system.

ANOTHER UPDATE: Reader Matt Ohzourk writes that, unlike the Tim Geithner situation, this isn’t so remarkable: “Glenn, as much fun as it is to make fun of one more Obama appointee with tax problems, the lack of late filing penalties makes sense. Under IRC 6651(a), your major penalty for filing a late return is based on a percentage of the tax due, i.e. if you’re due a refund, the 5% per month of tax due penalty doesn’t apply. According to the original link to jammiewearingfool, the Marshalls were due a refund and so had no tax due (and yes, their excuses are lame) Instead, you’re left on the hook for a measly $135 flat penalty for late filing a return with no tax due (and that’s a penalty that the IRS is quick to grant relief for if you can come with a reasonable cause defense).”

MORE: On the other hand, there’s this story:

I divorced in 1985. Confused and depressed, I didn’t file a return in ’85 for ’84. When ’86 rolled around, I was afraid to file as I knew the IRS would pounce on me for not filing the previous year. Ditto ’87. Finally I came to my senses and began filing again in 1988. In ’89 the IRS came calling. Even though I had all this time continued to have taxes withheld from my paychecks, there was still tax due along with a goodly amount of penalties and interest. I was taken to court where a federal prosecutor asked that I be ordered to pay the back taxes plus accrued penalties and interest. The judge so ordered….and for good measure tacked on 90 days jail time. The jail sentence cost me my job, a new spouse and, owing to shame and depression, most of the 90s. I grit my teeth whenever I read an article about well-connected people who have committed greater transgressions than those I committed getting off scot free while I had to serve jail time.

Should you choose to print this, please withhold my name.

Which experience is more common, I wonder?