Another Tax Problem for Obama Nominee

Feb 3, 2009 10:28am

The informal battle between members of the Obama Administration and the Taxman resulted in a casualty Tuesday, with news that President Obama’s nominee to be chief performance officer, Nancy Killefer, will withdraw her nomination following the revelation that she had a $946.69 lien on her property in 2005 for failure to pay taxes.

Killefer, who was announced to much fanfare by President Obama on Jan. 7 to serve in the new position to make the U.S. government "more effective, more efficient, and more transparent," is the third high-level Obama Administration official whose failure to pay taxes in recent years was disclosed in the past month.

A former officer with McKinsey & Company and the past assistant secretary for management, chief financial officer and chief operating officer at Treasury during the Clinton administration, Killefer joins the ranks of Treasury Secretary Tim Geithner, who failed to pay more than $40,000 in payrolltaxes when he worked for the International Monetary Fund, and Secretary of Health and Human Services nominee Tom Daschle, who — as ABC News was first to report last Friday — on Jan. 2 filed more than $140,000 in back taxes and interest, having failed to disclose more than $300,000 in past income, including the use of a car and driver for three years.

The Associated Press broke the story of Killefer’s tax lien placed against Killefer’s home in Washington, D.C., for failing to pay unemployment compensation taxes on household help. The issue was resolved five months after the D.C. government took action.

When President Obama announced Killefer’s new post, he called Killefer "an expert in streamlining processes and wringing out inefficiencies so that taxpayers and consumers get more for their money. And during her time at Treasury, she helped bring the department into the 21st century, modernizing the IRS, and preparing systems for Y2K."

Beyond confirming Killefer’s withdrawal, the White House had no comment on the matter. It was not clear why Killefer — whose tax transgression amounts to less than 1 percent of Daschle’s malfesance, and who dealt with her issue years ago as opposed to weeks ago during the vetting process — walked the plank while the White House continued to shelter Geithner and Daschle.

– Jake Tapper, Sunlen Miller & Yunji de Nies

UPDATE: Records show that Killefer owed $298 in unemployment compensation for household help, $48.69 in interest, and $600.00 in penalties.

View the February 2005 Certificate of Assessment and Tax Lien that shows the $946.69 lien, and the July 2005 Certificate of Release of Lien.

Below is the withdrawal letter from Nancy Killefer to President Obama:

"Dear Mr. President,

I recognize that your agenda and the duties facing your Chief Performance Officer are urgent. I have also come to realize in the current environment that my personal tax issue of D.C. Unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid. Because of this I must reluctantly ask you to withdraw my name from consideration.

I am deeply honored to have been selected by you and you have my deep appreciation for your confidence in me. You have my heartfelt support and best wishes for success in all your endeavors.

Respectfully yours,

Nancy Killefer"

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