Mitt Romney's 2010 Tax Disclosure May Be Lacking

[rocks 494]

WASHINGTON -- Presidential candidate Mitt Romney's tax returns may be more incomplete in their public release than was previously thought. Filings related to Romney's individual retirement account, already subject to press scrutiny, indicate that the presumptive GOP nominee should have filed a form accounting for unrelated business income taxes.

The unrelated business income tax is set up for tax-exempts like nonprofits and IRAs that engage in commercial activity. Not filing the form, known as a 990-T, may indicate that Romney's IRA funds are held by an offshore account in order to shield them from taxation.

Romney campaign spokesperson Andrea Saul did not return multiple requests for the 990-T form, nor did she answer repeated questions related to the matter.

From what Romney has disclosed, there is mounting circumstantial evidence that the IRA may hold offshore investments through what are known as "blocker corporations," which help him avoid paying taxes. Senator Max Baucus (D-Mont.) told The New York Times, "From what I have read about Governor Romney's tax returns, I think it raises very serious questions."

"We know Romney's IRA has Bain funds in it," explained Rebecca J. Wilkins, senior counsel for federal tax policy with the nonpartisan Citizens for Tax Justice. "Bain private equity funds are listed in those assets and those funds are located in the Cayman Islands."

Wilkins says that if Romney's IRA held those funds directly, instead of through a blocker corporation, a 990-T should have been filed. "Typically it doesn't even have to file a tax return," Wilkins says. "But if it has unrelated business income, then it has to pay the unrelated business income tax." And a 990-T would need to have been filed.

HuffPost previously uncovered another document that likely should have been filed among Romney's 2010 tax returns, which would have provided more details on his overseas bank holdings. Such a form has yet to be released by the Romney campaign.

The offshore tax avoidance could be huge. HuffPost recently reported that the candidate has between $20.7 million and $101.6 million in his IRA -- well above the average IRA value of $67,438 in 2010.

Vanity Fair raised the issue in its piece on Romney's offshore accounts:

Romney's I.R.A. also appears to have invested in so-called blocker corporations in the Cayman Islands and elsewhere. U.S. pension funds, foundations, and even I.R.A.'s routinely use offshore blocker corporations to avoid something called the Unrelated Business Income Tax, which was designed to keep nonprofits from competing with ordinary companies in areas outside their core purpose: if you invest directly you get hit with the tax, but if you invest in a blocker, which then invests in the U.S. business, you escape it. Romney's I.R.A. appears to have employed this lawful escape route, and his campaign has used language suggesting that it has. But that would mean the Romney camp's claim that Mitt's tax consequences of investing via the Cayman Islands is 'the very same' as it would have been had he invested directly at home is simply not true."

If Romney had been operating a nonprofit, his use of the offshoring loophole would be similar to the sort of activities Sen. Chuck Grassley (R-Iowa) has long sought to shut down. The senator has made similar tax avoidances a priority since 2007.

Two years ago, Grassley and colleagues in the Senate were stunned to learn that the Boys and Girls Club of America held more than $50 million in offshore accounts and funds, including some held in the Cayman Islands. The organization had to admit that it had used the Caymans to avoid paying the unrelated business income tax.

Grassley's proposed legislation to close the loophole has yet to come up for a vote.

Jill Kozeny, a Grassley spokesperson, told HuffPost that the the senator is not focused on IRAs that may employ offshoring. "This focus hasn't been on unlikely UBIT avoidance by pension funds, IRAs, or other tax-deferred retirement accounts since those funds and accounts are generally not using debt, such as tax-exempt bonds or real estate mortgages, to finance investments, which is what usually triggers UBIT for charities," she said via email.

Wilkins of Citizens for Tax Justice believes the loophole should be closed for IRAs. "Clearly it's an unintended loophole in the tax code," she says. "The reason they are making these investments offshore is to avoid paying the unrelated business tax."

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[Pooky 3,776]

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More distraction from the real issues facing this country.

When will this election campaign start to be about policy?

[Mr. Big Dog 10,747]

When will this election campaign start to be about policy?

As soon as Mitt releases his tax returns.

[Pooky 3,776]

As soon as Mitt releases his tax returns.

Irrelevant as ever, I see. Carry on.

[Mr. Big Dog 10,747]

Irrelevant as ever, I see. Carry on.

I don't think they are. I'd hate to see a tax cheat becoming president.

[I AM NOT THAT GUY 5,715]

I don't think they are. I'd hate to see a tax cheat becoming president.

If not a tax cheat himself, Obama certainly is an enabler:

White House staffers owe more than $800,000 in back taxes

As President Obama has called for all Americans to pay their fair share in taxes, Investor's Business Daily columnist Andrew Malcolm notes that the White House staff owes a pretty hefty amount of back taxes to Uncle Sam:

A new report just out from the Internal Revenue Service reveals that 36 of President Obama's executive office staff owe the country $833,970 in back taxes. These people working for [Obama] apparently haven't paid any share, let alone their fair share.

Previous reports have shown how well-paid Obama's White House staff is, with 457 aides pulling down more than $37 million last year. That's up seven workers and nearly $4 million from the Bush administration's last year.

The report is part of an annual IRS review of unpaid taxes by government workers across the executive agencies and Congress — and the White House actually has a much lower tax delinquency rate than many of the agencies and Congress. Still, the report is certainly political fodder as President Obama highlights the need for all Americans to sacrifice for the common good.

http://www.politico.com/politico44/2012/01/white-house-staffers-owe-more-than-in-back-taxes-112412.html

[mawilson 2,133]

I don't think they are. I'd hate to see a tax cheat becoming president.

Tax cheating is as American as apple pie.

[Pooky 3,776]

I don't think they are. I'd hate to see a tax cheat becoming president.

Why? Obama appointed one as his Treasury Secretary.

If anything, I'd say that was worse, especially since Romney has not been proven to be one.

[Danno 1,228]

I don't care if he never paid a dime, the more you feed the BEAST, the bigger it grows.

In any offensive move "Cutting off supply lines" is critical to victory.

[lostinblue 1,989]

The kenyan has nothing to run on. He has failed on everthing that matters. That is why the dimwits keep pushing the tax matter. The IRS has for certain kept tabs on Mitt. His taxes are a non issue just like every other non issue the press gets distracted by.Smoke and mirrors for the dimwits.

[Mr. Big Dog 10,747]

Tax cheating is as American as apple pie.

Yes, Mitt and the rest of plutocrats like to believe so. Most Americans pay their taxes by the book and do not maintain offshore accounts, have fancy attorneys and accountants look for tax shelters and fancy schemes to evade taxation. Mitt doesn't understand that (neither do you, apparently). Which is why Mitt has such a hard time connecting to regular people. He knows nothing about regular Americans - nor does he care to know anything about them. I bet you $10,000.00 on that one.

[Mr. Big Dog 10,747]

Why? Obama appointed one as his Treasury Secretary.

Did Timmy run for President? Didn't think so.

[Mr. Big Dog 10,747]

I don't care if he never paid a dime, the more you feed the BEAST, the bigger it grows.

In any offensive move "Cutting off supply lines" is critical to victory.

I don't care either if Romney happened to pay no taxes in any given year or over a number of years - as long as he didn't evade taxes illegally and then benefited from a tax amnesty. I do, however, question a candidate that professes his love for this country but then moves his money elsewhere. Certainly ain't the patriotic thing to do. So, let's see it.

[Pooky 3,776]

Did Timmy run for President? Didn't think so.

Worse. The President put the tax cheat in charge of financial policy for this country. And, as he freely admitted to Congress, he has no long term solution. Brilliant plan.

[Mr. Big Dog 10,747]

Worse. The President put the tax cheat in charge of financial policy for this country. And, as he freely admitted to Congress, he has no long term solution. Brilliant plan.

The Senate could have stopped him. They stopped a good few other nominees over the years. Look, I'm no fan of Geithner but as to the lack of a long term plan (genius clip once again - the RWNJ have this developed into an art), nobody has one. The closest we ever got to a plan was Simpson-Bowles. Obama didn't embrace it - big mistake in my opinion - Romney is currently running against it and Ryan derailed the commission's work outright making sure that Congress doesn't even get to cast a vote on it. What gives?