Snark aside, there's a huge difference tax negligence and tax fraud.
Not filing taxes for 5 years is fraud.
Filing and paying taxes while working for the IMF -- but not realizing you should've been paying the 'employer' half of payroll taxes as well -- is negligence.
The USA is the only country that requires tax returns & payments of expats that make no income from their home country and no longer live there. I'm not surprised many 'normal' people are very unaware of these facts when they move away from the USA.
On top of that you have huge accountant costs to file these complicated penalty prone returns even if you end up not owing any taxes year over year.
It's still 'negligence', your IMF example is just in part instead of in full.
I can sympathize with Geithner about his errors, but his situation seems much more obvious than the notion that you'd have to pay US taxes even if you're living and working outside the US. I bet most people would not even think that it was something that needed to be done, and I doubt the IRS sends you friendly reminders about it.
Perhaps my snark should've more explicitly called out Charlie Rangel. Nothing like misreporting your income while also being chairman of the Ways & Means Committee.
But really, all of the examples just underscore how insane the tax code has become.
Rangel's tax problems are probably less 'bad' than Geithner's. He owned a condo in the D.R. for 20 years, and over that time earned a total of $75k by renting it out. Less than $4k per year...
His excuse for not claiming the income is plausible too since the payments went straight against the mortgage through the resort it was attached to, so the money never hit his savings account. If you owned a home, rented a room on AirBnB, and then AirBnB paid off a small part of your mortgage, would most people know to claim that money as income?
That being said, the Nabors tax shelter mess, the unreported checking accounts, the multiple rent-controlled apartments, etc. all add up to show Rangel as a typical corrupt politician.
But really, all of the examples just underscore how insane the tax code has become.
I couldn't agree more. It's a problem when something like 50% of tax returns are wrong upon close examination.
I remember someone telling me that ignorance of the law is no defense. And I would think it wouldn't be too much to ask that a Federal Reserve Bank President be aware of tax consequences/implications.
Not filing taxes for 5 years is fraud.
Filing and paying taxes while working for the IMF -- but not realizing you should've been paying the 'employer' half of payroll taxes as well -- is negligence.