Panel Says Ron Kirk Underpaid Taxes

[babylonsister]

http://lostintransition.nationaljournal.com/2009/03/panel-says-ron-kirk-underpaid.php?ref=fp3

Panel Says Ron Kirk Underpaid Taxes

By CONGRESSDAILY STAFF



President Obama announces Ron Kirk as his pick for U.S. Trade Representative. (Credit: Nicholas Kamm/AFP/Getty Images)

Leaders of the Senate Finance Committee this afternoon revealed that another of President Obama's nominees -- U.S. Trade Representative-designate Ron Kirk -- has tax problems.

Finance staff briefed aides to committee members today on the revelations, which indicate the former Dallas mayor underpaid taxes to the tune of $9,975 during 2005-07, and that he has agreed to promptly file adjustments. The underpayments deal in part with speaking honoraria he received that he listed as charitable donations to his alma mater, Austin College.

Kirk instead should have reported the honoraria as taxable income and then deducted the donations. The panel also asked Kirk for substantiation of other charitable donations he has made, including a television set, and it has questioned Kirk's write-offs of business expenses, including those for Dallas Mavericks season tickets.

Finance Committee leaders said in a joint statement that it was important for all panel members to have the necessary information in advance of next Monday's confirmation hearing. In a separate statement, Finance Chairman Max Baucus, D-Mont., reiterated support for the nominee: Kirk "is the right person for this job and I will work to move his nomination quickly," he said.

[sonias]

1. Think it's time we fixed the tax code

A lot of very smart people are obviously doing it wrong. :shrug:

And you know some of these people have someone else do their taxes. This story didn't say if Kirk paid a tax return preparer.


Sonia

[WolverineDG]

2. I just got an IRS love letter today

fuckers! somehow selling stock in my ira & keeping the proceeds in my ira means that I should have claimed it as "income," even though I never saw a dime of it, since I KEPT IT ALL IN THE I.R.A.!

dg

[sonias]

3. dg, you're not allowed to save tax free money for your retirement

Only Wall Street bankers are allowed to make off like bandits, don't ya know?

You do know about Roth IRAs don't you?

wikipedia entry
In contrast to a traditional IRA, contributions to a Roth IRA are not tax-deductible. Withdrawals are generally tax-free, but not always and not without certain stipulations (i.e. tax free when the account has been opened for at least 5 years for principal withdrawals and the owner's age is at least 59 ½ for withdrawals on the growth portion above principal.) An advantage of the Roth IRA over a traditional IRA is that there are fewer withdrawal restrictions and requirements. Transactions inside the Roth IRA account (including capital gains, dividends, and interest) do not incur a current tax liability.

Warning when you first set one up i.e. convert from regular IRA there will be a tax payment you have to make to convert and it can be very hefty.

You could set up a separate Roth IRA from scratch that you put money into in addition to your regular IRA.

Huge disclaimer:
I'm not a financial adviser and I don't even play one on TV.

Sonia

[WolverineDG]

4. this was a transaction done within the IRA itself

I wasn't converting from traditional to Roth. Just selling one thing & then using the proceeds to buy something else, within the Roth itself. I never saw the money.

dg

[sonias]

5. Now that sounds very confusing

I thought all transactions inside a Roth were tax free. So I guess the ruling is no sales evah! I agree with you, you think you would be able to take the proceeds inside a Roth and buy something else as long as the initial principal is maintained and there are no withdrawals.

Pretty damn stupid of them! I'm pissed right along with you! :grr:


Sonia

[WolverineDG]

6. I don't have a Roth

there is an IRA & a Roth IRA. I have a regular IRA. It was invested with one group of stocks & my advisor suggested I sell off that & buy another. So I did. All within the IRA itself. It wasn't stock I owned separate from the IRA; it was stock owned by the IRA. Which, btw, I had already paid taxes on when I inherited it from my dad. :grr:

People rollover IRAs all the damn time. I guess they need my money so BoA or Citi can buy more jets. :nuke:

dg

[sonias]

8. Now I understand

But your financial adviser didn't know there would be a tax consequence on the transaction? Or he/she didn't advise you of that?

Man that sucks.

:hug: is all I can give you!


Sonia

[Baby Snooks]

9. Off with his head!!!!

I am just amazed that anyone would attempt to portray Ron Kirk as a tax cheat over an error that resulted in a tax liability of less than $10,000. I personally have objections to Ron Kirk being appointed to anything but to imply this is sufficient reason not to appoint him borders on the ridiculous. But no doubt at the proper time, if he hasn't already, John Cornyn will do just that. After he's made sure he's paid all his taxes of course. Twenty years ago the Republicans would have sicked Rudy Giuliani on everyone and sent them off to prison.

Twenty years ago that is what Rudy Guiliani did when he sought indictments of Harry and Leona Helmsley over accounting errors but what they didn't realize and most still don't is that whoever prepares your taxes isn't accountable for the errors. You are.

After she was convicted, the IRS finally did an audit. They found that during the years she was convicted of evading $1.2 million in taxes, the Helmsleys had also managed to overpay their taxes by $15.5 million.

I suspect some of the 200+ accountants they employed were fired. The only thing you have to fear more than the IRS is the certified accountant who does your taxes.

[shagsak]

7. season tickets could be considered a business expense

I take clients to Roughrider games all the time, and I write off costs as entertainment. It's perfectly acceptable under law.

I guess it depends on the Maverick's season :-)