THE GEITHNER PENALTY WAIVER ACT

I know I said I would not be posting today and tomorrow - but this item caught my attention before leaving for AC on Wednesday morning.

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Here is an email that I got from John Carter’s office before leaving for AC (highlights are mine) -

Geithner Penalty Waiver Act Introduced in House. Carter Bill would eliminate IRS penalties for foreign depositors:

Taxpayers who applied for the U.S. Treasury Department’s amnesty plan for foreign income should pay the same penalty rate as that paid by the Treasury Secretary on his International Monetary Fund (IMF) back taxes, according to House Republican Conference Secretary John Carter. Carter and Congressman Lynn Westmoreland (R-GA) tonight delivered speeches on the House Floor Live on CSPAN in support of the Geithner Penalty Waiver Act.

Carter says the nation must take that step if it is to uphold the Rule of Law and the Constitution. “People must have the assurance they will be treated like their neighbor when an issue of law arises. That is a necessary ingredient to have a civil society, and that is what we have been fighting for in Iraq and Afghanistan.”

The former Texas judge this week is introducing the Geithner Penalty Waiver Act to grant all taxpayers currently seeking penalty relief on foreign deposit back taxes the same zero percent penalty rate as Geithner was assessed for failure to report or pay taxes on IMF income.

Carter says the Equal Protection Clause of the 14th Amendment to the U.S. Constitution mandates equal penalties for similar offenses, and that the failure of the IRS to assess any penalties against Geithner demands similar penalties for all taxpayers with substantially equivalent cases.

“This bill seeks to codify what is now established by the law of precedent,” says Carter. “The Geithner case has established a legal precedent for the determination of penalties by the IRS, and that precedent can be cited in all federal tax courts. The penalty is now set at zero.”

“Taxpayers who willfully attempt to evade paying their fair taxes should pay a penalty, or our tax code becomes unenforceable,” says Carter. “This bill is not to reward tax evaders, but to defend the Rule of Law itself. If we as a nation choose not to enforce the law against the politically privileged, then we cannot enforce the law against others without undermining respect for the law itself.”

Carter had previously introduced the "Rangel Rule Act of 2009", saying at the time – “if you're caught cheating on your taxes, you would pay what you owe, then write ‘Rangel Rule’ at the top of your return, and you wouldn't be charged any penalty or interest”.

He has a good point. All taxpayers should be treated the same, regardless of government position.

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The point is not that those who FU on their taxes should not pay penalty or interest - but that cafones like Rangel and Geithner, who should know better, should!

As another tax pro/blogger pointed out (I forget who) - if the regulation of all tax professionals by the IRS passes Congress and tax pros must pass a test and take continuing education to become a “Licensed Tax Preparer” in order to continue to practice, then those members of Congress who write the tax laws, and those in government who oversee administration of tax law, like Rangel and Geithner, should also be required to pass the test and take annual continuing education in taxes.

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TTFN