Tim Geithner's tax lessons

Tax lessons from a federal appointee

"These were careless mistakes. They were avoidable mistakes. But they were unintentional. I should have been more careful. I take full responsibility for them. I have gone back and corrected these errors and paid what I owed."

Sound familiar?

Many of us, yours truly included, have messed up a tax return. So did Timothy Geithner, who issued that explanation/apology yesterday to members of the Senate Finance Committee.

You know Tim. He's the president of the Federal Reserve Bank of New York. He's also President Barack Obama's choice to run the Treasury Department, that federal institution that oversees the Internal Revenue Service.

Yep, that same IRS with which Geithner had some pre-appointment issues, like around $40,000 in unpaid self-employment taxes.

Oops. His bad. Hence his contrition before the Senate panel.

While most Capitol Hill watchers say Geithner is a smart guy, a good choice to lead Treasury and probably will be confirmed soon (the Senate Finance Committee endorsed him this afternoon), he's still catching heat for not properly paying his taxes.

And well he should.

Help apparently was no help: Geithner says he used tax software (TurboTax to be specific, which issued a statement following the potentially embarrassing revelation) and also had an accountant check over his returns before sending them to Uncle Sam.

Still, mistakes were made.

Is there more to the now-paid taxes than we've heard? Maybe. Political conspiracy theorists are having a field day. And other folks are just angry that it looks like Geithner hasn't really been punished enough for his nonpayments.

I understand the anger. But the reality is that the IRS doesn't want to literally take a pound of tax flesh; it just wants its money, as quickly as possible. So if Geithner ponied up, Uncle Sam is happy and has moved on to other scofflaws.

As for how innocent the mistake was or whether the software and/or accountant messed up, we'll probably never know the full story. True, $40,000 give or take a few thousand is a large amount. But to folks who make many, many times more money than you or I, it's just a drop in the bucket. Yes, rich people really can overlook such, to us, large amounts.

So I'm going to cut Geithner some slack here. Sometimes tax mistakes really are just that.

Geithner's tax lessons: But we all can learn some important lessons from Geithner.

First, the taxpayer who signs the return is the ultimate responsible party. So don't put your John Hancock, by pen or e-filing PIN, on your return until you're sure it's correct.

Secondly, check, recheck and triple check your return before sending it in. Even when we use a computer program, mistakes are still possible. Remember: Garbage in, garbage out.

Finally, if you're considering running for public office or hoping for a cushy high-level appointment, hire a tax pro beforehand to go through all your tax paperwork, past and present.