Vic Socotra

04 February 2009

Form 1099-MISC

(IRS Logo)

Former Senator Daschle was a little contrite when he told his former colleagues on the Hill that his failure to pay $128,000 in taxes for the use of a friend’s chauffer and car service was “completely inadvertent.”

I can certainly understand. I was briefly in the business of providing Senators and Congressmen with travel, and it is all free, really, a perk of the job. All it took was a letter to my Department from the Chairman of a Committee of Jurisdiction and I was authorized to whistle up a military version of a business jet, a crew, and take off for wherever the Senator wanted to go.

It really is the way to get around, much better than Continental Air Lines.

I can understand that after thirty years of that sort of treatment you would expect that the private life would work that way too; some guy in a black Town Car with livery tags would be waiting down in the circle in front of the building each morning, and whisk you off to wherever you needed to go.

Imagine not having to worry about parking, or looking up form your papers to prepare for a meeting. It just seems right.

As it turns out, it was really quite a value. If the taxes were $128,000, and if Mr. Daschle was making the millions they say he was, the value of the service was actually something closer to $500,000, which is enough to get the attention of most of us, but obviously was lost in the clutter for the Senator.

It is a hazard of power. Senators don’t make that much money in the grand scheme of things, any more than the President does. The cool part is in the perks.

My pal the Admiral was just down at the commissioning of the USS George H. W. Bush, the last of the Nimitz-class aircraft carriers. It was a big deal, quite well done. The interesting thing about it was that these ceremonies usually happen after sea-trials. That is when the ship is deemed ready for acceptance by the working Fleet from the builder.

The mighty ship wasn’t and isn’t. It was towed from the building ways to the operational piers for the occasion; for the simple reason that the former President could order it done to honor his Dad. It is pretty cool.

I suspect that is why there was some squirming in the Senate, and some jotting on note-pads. Everyone up there gets used to the trappings of office and the perks, and it is important to remember what real life is like.

I feel for Senator Daschle. He did not own the car, didn’t pay the driver, and one other unapologetic Senator was honest enough to say that is was a simple enough mistake because he did not get an IRS Form 1099-MISC.

I have been trying to collect all the papers for tax season myself, and God only knows what all that stuff means. It is an impressive pile, though.

Let’s put it in context. Several of the Agencies around town have deals for Metro and bus passes that are given out to employees to lessen the need for them to drive their cars downtown. It is a perk of the job, and in inducement to use public transportation. I never took the deal, but I am pretty sure that no one in the Pentagon was waiting for their 1099-MISC forms to report the perk at tax time.

In fact, didn’t the IRS collect twice on the Daschle deal? Once from the guy who owned the Town Car and contributed to the driver’s Social Security, and then again from Daschle for the use of same?

Oh well. The problem was magnified in the stream down from Timothy Geithner’s little tax problem. He didn't pay Social Security and Medicare taxes for several years while he was working at the IMF, and employed an immigrant housekeeper who was briefly undocumented.

Tim is the guy to take on the Recession, and despite the minor $38,000 issue, his service is so vital that they confirmed him anyway.

Nancy Killefer had another one of those domestic tax problems, too. The District even put a lien on her house, which is enough to get your attention. That is why she withdrew her candidacy to be the first chief performance officer for the federal government. Not being able to manage the house in full compliance has no connection with being able to manage the entire Federal Government, of course. Apples and oranges altogether. But she said she didn’t want her failure to contribute to payroll taxes on her household help to become a distraction for the Administration.

I’m deeply sympathetic. I know the perception thing is a big deal, particularly when our new President has taken the high-risk public position that his cast of rascals are more virtuous than the other one.

They are not. They are just another bunch of working stiffs who have to live high-profile lives in an expensive town that is fueled by perks. The Republicans are crowing that Democrats are much less reluctant to tax other people because they do not abide by the tax laws themselves. I know the Dems were much more fun to travel with, but maybe they can't afford the tax accountants the Republicans can.

It is all true, of course, but that is the way it works here. It really just points out that the tax system is incomprehensible and unfair to those who actually have to pay them.

I don’t know if there is any better way to handle the problem that the way the President did, which was to say he screwed up and move on. That was a little refreshing. He says there is a new era of responsibility. But I suspect he will grow into the job, just like all the others.

Like the ship-commissioning that President Bush ordered in his last weeks in office. It was an official act of the United States Government, and thus was not a taxable act ivity.
I mean, really. Can you imagine waiting around the mailbox in Dallas for your 1099-MISC to tell you what you owe for moving an aircraft carrier across town?

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