Should Daschle Be Confirmed?

Do you think that another of Obama's picks that didn't pay their taxes should be confirmed? I don't.

Daschle knew since last June that he owed this money yet didn't pay it until January after he was picked by Obama.
He didn't even tell Obama about it until after he had paid it.

This is the second cabinet pick to have not paid taxes they knew they owed these taxes for months, and in some cases years.

Why are people like John Kerry and others calling these people's refusal to pay their taxes "honest mistakes"? It's a mistake when you don't realize you have made a mistake, it's a mistake when you correct it as soon as you find out about it. These people don't even make an effort to take care of it. Makes one wonder if he and Geithner hadn't been offered these White House Cabinet positions if they would have ever paid their tax debt.

This is just a little bit of one of the many articles about this "Mistake" Daschele claims he made. And his unpaid taxes aren't the only concern in regards to whether he should be confirmed. This too is an issue "he made more than $200,000 in the past two years speaking to members of the industry that President Obama wants him to reform" Daschle has made more than 5.2 million in the past two years.

And we still have Charlie Rangle that hasn't been paying taxes on rental properties.


WASHINGTON -- Tom Daschle has apologized for income tax errors that resulted in $146,000 in back payments, with $6,000 of that being paid on Monday on the request of the Senate Finance Committee.

Daschle recently filed amended tax returns to reflect $128,203 in back taxes and $11,964 in interest after questions were raised by the Senate Finance Committee reviewing his nomination to be health and human services secretary.

Daschle spokeswoman Jenny Backus told FOX News that an additional $6,000 is related to a car service he used. The amount covers Medicare payroll taxes due for the driver who provided car service for Daschle.

Backus said Daschle asked his accountant in June if the car service could be a tax issue. He learned that the service -- valued at more than $250,000 over three years -- was subject to taxes. The issue never came up at Daschle's first hearing before members of the Senate Health, Labor and Pensions Committee on Jan. 8.

The financial disclosure form Daschle filed about a week ago also shows that he made more than $200,000 in the past two years speaking to members of the industry that President Obama wants him to reform.

The speaking fees were just a portion of the more than $5.2 million the former South Dakota senator earned over the past two years as he advised health insurers and hospitals and worked in other industries such as energy and telecommunications, according to a financial statement filed with the Office of Government Ethics.

Daschle's financial disclosure report was released after he acknowledged that he had recently filed amended tax returns for 2005-2007. The amended returns reflect additional income for consulting work, the use of the car service and reduced deductions for charitable contributions.

Daschle wrote that his "mistakes were unintentional" and he had "disclosed this information to the committee voluntarily, and paid the taxes and any interest owed promptly."

Baucus said that the finance committee is vetting Daschle's nomination and will reveal any details afterward.

"The ability to advance meaningful health reform is my top priority in confirming a secretary of health and human services, and I remain convinced that Senator Daschle would be an invaluable and expert partner in this effort. I am eager to move forward together," Baucus said.

The Finance Committee told Daschle on Friday the taxes out to be paid and Daschle asked his accountant to review it over the weekend. Daschle will pay the amount today.

Backus said Daschle considers the tax mistake "stupid" and is doing all he can to remedy the situation. She said it should not be missed that the Internal Revenue Service conducted a random audit of Daschle in 2006 and found no reason to change his return.

Backus said the money he earned in speaking fees from health care interests do not pose a conflict for the health care reform Obama wants him to lead.

"He welcomed every opportunity to make his case to the American public at large and the health industry in particular that America can't afford to ignore the health care crisis any longer," she said.

Among the health care interest groups paying Daschle for speeches were America's Health Insurance Plans, $40,000 for two speeches; CSL Behring, $30,000; the National Association of Boards of Pharmacy, $16,000; and the Principal Life Insurance Co., $15,000.

Obama has said that no one in his administration who has lobbied on a set of issues within the past two years can deal with the same subject matter. The president has already approved a few exceptions. Daschle is not a registered lobbyist but he worked at a lobbying firm.

Daschle said in a letter to the Department of Health and Human Services ethics office that if he's confirmed by the Senate, he will resign as a senior policy adviser at the Washington law firm of Alston & Bird LLP. He reported earnings of more than $2 million from that firm during the past two years.

Daschle also earned more than $2 million in consulting fees from InterMedia Advisors LLC of New York, an investment firm specializing in buyouts and industry consolidation. He said he also intends to resign from that firm upon his confirmation.

Democrats expressed strong support for Daschle and credited him with acknowledging a mistake. Republicans took some shots at the new administration now that a second Cabinet pick has run into tax problems and an earlier nominee withdrew amid a grand jury investigation. However, they said they would take the time to hear Daschle's explanations.

The Senate Finance Committee planned to meet behind closed doors to discuss the Daschle nomination. Daschle has not been told when the committee will vote on his nomination.

Senators said Sunday they will await guidance from the finance panel before deciding whether the tax problem could stall or even derail his confirmation.

Sen. Jon Kyl, who is on the committee, said members will try to understand his explanation. "I think it's too early to tell," Kyl, R-Ariz., said on "FOX News Sunday." "Well, sure, you have to be troubled by it."

RAW DATA: Full Senate Finance Committee Report on Daschle

Statement from the Senate Finance Committee on the Nomination of Thomas A. Daschle:

Thomas A. Daschle recently filed amended tax returns for 2005, 2006 and 2007 reporting $128,203 in additional tax and $11,964 in interest. The adjustments resulted from additional income for consulting services and the use of a car service, and reductions in charitable contribution deductions. Senator Daschle filed the amended returns voluntarily after Barack Obama announced his intention to nominate the senator to be the Secretary of Health and Human Services. The Presidential Transition Team identified the charitable contribution issue and Senator Daschle self-identified the income adjustments.

Senator Daschle paid his long-time personal accountant to prepare his original and amended tax returns for years 2005, 2006 and 2007. All returns were filed jointly with his spouse. The 2006 tax return was examined by the Internal Revenue Service. Senator Daschle was represented during the IRS examination by his accountant. The senator did not have any personal contact with the IRS examiner. The IRS did not propose any adjustments to Senator Daschles tax return and accepted it as filed.

Tax Adjustments

Background

On January 2, 2009, Thomas A. Daschle filed amended tax returns for 2005, 2006 and 2007 to report the following adjustments:

Unreported income from the use of a car service in the amounts of $73,031, $89,129 and $93,096 in 2005, 2006 and 2007, respectively.

Unreported consulting income of $83,333 in 2007.

Reductions to charitable contribution deductions of $1,500, $7,575 and $5,888 in 2005, 2006 and 2007, respectively.

The car service and the consulting income were received in connection with Senator Daschles business relationship with InterMedia Advisors. The table on the next page shows the additional income and reduced deductions, tax and interest the senator reported with each amended return.

Finance Committee Staff reviewed Senator Daschles original and amended returns for tax years 2005, 2006 and 2007. Staff requested information to substantiate several items on the returns and has completed the review of this data. Senator Daschle met personally with staff on January 26, 2009 and his accountant participated in the meeting via telephone. Telephone interviews were conducted with the InterMedia General Counsel and Accounts Payable clerk on January 29, 2009.

Car Service Income

Senator Daschle is a limited partner in InterMedia Partners of Englewood, CO and Chairman of its Executive Advisory Board. Senator Daschle also is an independent consultant to InterMedia Advisors, LLP of New York City. He entered into a business relationship with InterMedia in February, 2005. Beginning in April, 2005, the senator was provided the use of a car and driver by Mr. Leo Hindery, the Managing Partner of InterMedia. In addition to being business partners, Mr. Hindery and Senator Daschle have been personal friends for many years. Charges for the car and the services of the driver were billed to InterMedia. InterMedia did not issue Senator Daschle a Form 1099 for the value of the car service and Senator Daschle did not report the value of the car service as income on his original tax returns for 2005, 2006 and 2007.

Senator Daschle told staff that in June, 2008, something made him think that the car service might be taxable and he disclosed the arrangement to his accountant. Under Section 132 of the Internal Revenue Code, the value of transportation services provided for personal use must be included in income. Senator Daschle estimated that he used the car and driver 80% for personal use and 20% for business use. On January 2, 2009, Senator Daschle filed amended returns for 2005, 2006 and 2007 reporting the value of the car service as income. He did not pay self-employment tax on the personal value of the service. It was determined during the Committee review of Senator Daschles returns that the personal value of the car service is subject to self-employment tax. The senator has acknowledged that the 2005, 2006 and 2007 tax returns will need to be adjusted to pay the applicable Medicare taxes of 2.9% of the personal value of the service.

Consulting Income

Senator Daschles consulting arrangement with InterMedia Advisors provided that the senator be paid $83,333 per month ($1,000,000 per year) for his services. Senator Daschle received a Form 1099 from InterMedia Advisors each year reporting income from consulting fees, bonuses and reimbursements. The 2007 Form 1099 did not include the May, 2007 payment for consulting fees in the amount of $83,333. Senator Daschles accountant told Committee staff that at the time he was preparing the senators 2007 tax return he thought the Form 1099 might be understated. Staff reviewed e-mails between the accountant and Senator Daschle from March, 2008 discussing the amount reported on the Form 1099 and whether any payments were missing. Senator Daschle told the accountant that the January, 2007 check was received in December of 2006, and that was why the 2007 Form 1099 reported only 11 monthly payments. However, during the January 29, 2009 teleconference, InterMedia personnel told Committee staff they were unaware of any times when Senator Daschle was paid earlier than the first Friday of the month. The amount on the 2007 Form 1099 matched Senator Daschles personal records of payments received from InterMedia Advisors in 2007. Neither included the missing payment. The accountant did not pursue the matter further and reported the 2007 1099 amount on the Daschles 2007 Form 1040.

In December, 2008, the senators accountant contacted InterMedia while compiling information for Senator Daschles financial disclosure reports. InterMedia then discovered that the May, 2007 consulting fee payment had been omitted from the Form 1099 and notified the accountant. InterMedia personnel explained to Committee staff that the regular accounts payable (AP) clerk was on maternity leave when the May payment was due The temporary AP clerk completed a wire-transfer for the payment to the senator instead of following the usual procedure of issuing a check on the first Friday of each month. The wire-transfer was not posted to the normal InterMedia account and therefore it was not included in the 2007 Form 1099 that was issued.
Senator Daschle reported the $83,333 missed payment as income on the amended 2007 tax return. InterMedia Advisors filed a corrected Form 1099 on January 7, 2009.

Charitable Contributions

During the vetting process, the Presidential Transition Team identified certain donations that did not qualify as charitable deductions because they were not paid to qualifying organizations. Senator Daschle adjusted his contribution deductions on his amended returns for 2005, 2006 and 2007 to remove these amounts and add additional contributions

Outstanding Issues

Committee staff still is reviewing whether travel and entertainment services provided to the Daschles by EduCap, Inc., Catherine B. Reynolds Foundation, Academy Achievement, and Loan to Learn should be reported as income.

In response to Committee staff inquiries, the senator provided additional documentation for the Daschles charitable contributions for 2005, 2006, 2007. Staff notes that while copies of checks were provided, the proper donee acknowledgement for contributions over $250 was not provided for many of the charitable contributions as required for deductibility. The returns were not amended for these amounts.