More Back Tax Issues for an Obama Nominee

Mar 2, 2009 5:14pm

This time it’s United State Trade Representative nominee Ron Kirk who owes back taxes, joining the ranks of other tax-addled Cabinet nominees such as Treasury Secretary Tim Geithner, former Health and Human Services Secretary designate Tom Daschle, and former chief performance officer nominee Nancy Killifer.

Kirk owes $9,975 in back taxes, most of that from speaking engagement honoraria. Kirk had told organizations to give speaking fees directly to his alma mater, Austin College. In all, $37,750 of honoraria were not reported as income for tax years 2004, 2005, 2006 and 2007, the Senate Finance Committee reported, saying that Kirk should have accepted the money directly, made the donations himself, and then claimed the cash as charitable donations.

By not doing so, Kirk avoided approximately $6,000 in taxes, the committee said.

In addition, Kirk had declared as an entertainment expense more than $17,000 in tickets to Mavericks’ games.

The committee told Kirk to go back and look at his records, and to pay personal income taxes on any game when he couldn’t recall the name of the person whom he took to the game and the business they accomplished at the game. Kirk subsequently substantiated $9,900 of the total $17,382 as qualifying entertainment expenses, meaning he will pay an additional $2,600 in taxes.

"We are confident that Mayor Kirk will be confirmed," said White House spokesman Ben LaBolt. "The president nominated Mayor Kirk because of his proven ability at the negotiating table — building consensus between opposing stakeholders in Dallas and crafting deals to create opportunities for U.S. businesses overseas. The mayor is working with the Finance Committee on a few minor issues mostly relating to a scholarship fund he set up at his alma mater — Austin College.  The nomination is on track — the Committee has scheduled a hearing for next Monday."

The issues were raised after Kirk’s nomination team informed Finance Committee staff that in October 2008, he’d paid $2,188 in additional taxes plus $139 in interest for tax year 2006. The IRS had told Kirk that he’d failed to include a speaking honorarium of $5,000 and dividend income of $819. 

On Feb. 6, 2009, the Finance Committee asked Kirk to clarify his practice of assigning honoraria to Austin College.

Kirk responded on Feb. 17 and met with Finance Committee staff on Feb. 19. He submitted additional information to Committee staff on Feb. 24, 2009 and Feb. 28, 2009.

Kirk’s nomination does not appear to be imperiled.

– jpt

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