Employer Taxes Deducted from Employee Pay

Not so, Paul. In signed paperwork with the IMF, Geithner acknowledged receipt of extra funds to cover the added SE tax and further attested that he understood how it was to be reported.

True. he was therefore playing the audit lottery game after a fashion, betting on the fact that IRS would not go back any further.

It was already clear to him back that first year of 2001 when he received the extra funds, as indicated by the signed documents I referred to above.

Whether he did or did not see it as being self employed we can't say. At this point I kinda doubt he had any understanding of the differences between employee and non employee. Just because you know a lot about finance, doesn't mean one is tax savvy.

But we are all agreed that he evaded his responsibilities.

ChEAr$, Harlan

Thanks, I now see that this is in Section 15 of Publication 15.

This information makes me feel slightly more lenient towards the recipient of such a W-2.

Steve

"Harlan Lunsford" wrote

You've been down roads like that before. It only proves he received and signed for the papers. Now, if there was a test on the subject, that might provide some insight into what he understood.

I wonder how this standard works out for people who aren't nominees for cabinet posts? "I signed it but I didn't know what it meant." Wouldn't he need to at least raise this as an affirmative defense against a fraud allegation?

It suddenly occurred to me that this is exactly the same way clergymen see their W2 forms. They, too, have to pay their own SE taxes.

ChEAr$, Harlan Lunsford, EA n LA

Oh, you mean like one of those "no doc" mortgages? (grin

ChEAr$, Harlan Lunsford, EA n LA

Clergy also compute SE tax (but not income tax) on their housing allowance.

"TheMightyAtlas" wrote

I've been to two closings in six months. Both times the attorney would give a 15 second explanation of what *this* page means before sliding it over the table for me to sign. I'm quite sure that I didn't read every line on every page, which means I am equally sure I don't fully understand all the potential ramifications of the papers I signed. That does not, however, relieve me of my obligations under the terms of the loans or anything else related to the properties.

I'm just pointing out that we sign a lot of stuff in a day without fully understanding what the implications might be, or remembering some obscure matter six months later when tax returns are being prepared.

Yes, he should have known about the tax issues regarding his pay. Yes, even if he did err on his returns, he should have fixed them back as far as he needed to once the error was brought to his attention.

In my line of work it is sometimes suggested that one signs a patent application without having a chance to read the entire (often voluminous) document. Legally, this is a big no-no, and you would look pretty stupid during a deposition or litigation admitting that you never read the document you signed. I can only imagine it does not work in your favor.

Steve

I have been to too many closings myself. I am actually the bane of the title attorneys, because I do read everything myself. One closing took over four hours.

I have also filled out paperwork for seven different employers in the last 15 years.

There is a huge difference in the complexity of the forms you fill out in these two circumstances.

I happen to know two people who work for the World Bank. One of them got caught in exactly this trap. She didn't deny that she knew she was supposed to pay the SE taxes. She had six years less education than Mr. Geithner. Geithner was probably more hurried when he filled out the paperwork, I'll grant you that.

I guess I will ask the good folks on this board a question. How does the IRS draw the line between a simple deficiency and tax fraud/ evasion? Isn't "playing the audit lottery" in and of itself tax evasion? Or do you have to do something else?

If he didn't understand it, that's more evidence that he's unqualified.

Seth