Four Treasury Dept Nominees Left Hanging As Senate Leaves Town

According to Nasdaq.com, the Senate adjourned Thursday for a break that will last until January 20^th, 2010. Although the Senate was able to pass a health care bill, and raise the government’s debt limit, they left four Treasury Department nominees waiting on their confirmation.

Those nominees include Lael Brainard, the White House's pick for Treasury under-secretary for international affairs, whose nomination had been delayed for months as Senate Finance Committee staff scrutinized her tax returns.

The Finance Committee approved the nominations of Brainard and the other three Treasury officials Wednesday, but the nominations did not clear the full Senate because of an objection from at least one senator. At press time the source of the objection could not be learned.

Meanwhile, the Senate confirmed Miriam Sapiro as Deputy U.S. Trade Representative, before adjourning. It also confirmed Paul Anastas as an assistant administrator at the Environmental Protection Agency, and John Norris as a member of the Federal Energy Regulatory Commission.

The other Treasury nominees who will have to wait until the Senate returns for final confirmation include Michael Mundaca for assistant secretary for tax policy; Mary John Miller for assistant secretary for financial markets; and Charles Collyns for deputy under secretary for international finance.

Sen. Charles Grassley (R., Iowa), had threatened to block those nominees because of a dispute with the Internal Revenue Service over small business tax penalties, but he lifted that objection Wednesday evening.

Labor Secretary Nominee Has Tax Problems Too

Web CPA recently discussed another of Obama’s cabinet nominee’s who is having tax problems, Hilda Solis. A snippet of the post can be read below, but the full text can be read here.

In the latest sign of tax trouble in the Obama cabinet, Labor Secretary-designate Hilda Solis’ husband had tax liens filed against him.

Confirmation hearings for Rep. Solis, D-Calif., were delayed after news of the tax problems surfaced. The White House admitted to the latest tax snafu after USA Today discovered 15 tax liens dating back to 1993 from the State of California and Los Angeles County totaling $7,630, some of which have since been paid. The tax liens had been filed against Solis’s husband, Sam H. Sayyad, and his business, Sam’s Foreign and Domestic Auto Center. Sayyad paid $6,400 this week to settle the outstanding tax liens, but still plans to appeal them.

Solis is the fourth nominee to the Obama administration to face tax questions in recent weeks. Earlier this week, former Senate Majority Leader Tom Daschle withdrew his nomination for secretary of Health and Human Services after he was forced to pay $140,000 in taxes and interest, mainly for the use of a car and driver provided by a private equity firm between 2005 and 2007.

Treasury Secretary Timothy Geithner also needed to pay over $42,000 in taxes, interest and penalties for self-employment taxes that he owed from work he did between 2001 and 2004 for the International Monetary Fund.

Nominees' Tax Problems Could Prompt More People To Cheat

From USA Today:

The high-profile tax missteps of three of the Obama administration's key nominees could make it more difficult for the IRS to enforce the law, tax preparers and academicians say.

Numerous studies have shown that taxpayers are less likely to comply with the law if they believe other taxpayers are cheating, says Jason Mazzone, associate professor of law at Brooklyn Law School. "Taxpayers don't like to be suckers," he says.

On Tuesday, tax problems derailed the nominations of former Senate majority leader Tom Daschle for secretary of Health and Human Services, and Nancy Killefer as the government's chief performance officer. Earlier, Treasury Secretary Timothy Geithner's nomination was delayed by revelations that he had failed to pay self-employment taxes.

"I think a number of Americans will take a look at this and say, 'If they're getting away with it, why shouldn't I?' " says Scott Sandstrom, associate professor of accounting at the College of the Holy Cross in Worcester, Mass.

Americans are among the most law-abiding taxpayers in the world, in part because the IRS uses computer matching programs that make it difficult to cheat, says Walter Pagano, a former IRS agent who is a partner at accounting firm Eisner.

According to a new survey by the IRS Oversight Board, 89% of Americans believe it's unacceptable to cheat on taxes.

Still, the IRS estimates that $300 billion in taxes owed goes uncollected every year.