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Posted at 12:35 PM ET, 07/30/2012

Romney was audited, but that may not mean anything

Dems are pouncing on Mitt Romney’s admission in an interview with ABC News that he has been audited in the past:

QUESTION: From what you have released and from what we have seen we know that there was one year when you paid about 13.9% tax rate. Can we clear this up by asking a simple yes or no question? Was there ever any year when you paid lower than 13.9%?
ROMNEY: I haven’t calculated that. I’m happy to go back and look but my view is I’ve paid all the taxes required by law. From time to time I’ve been audited as happens I think to other citizens as well and the accounting firm which prepares my taxes has done a very thorough and complete job pay taxes as legally due. I don’t pay more than are legally due and frankly if I had paid more than are legally due I don’t think I’d be qualified to become president. I’d think people would want me to follow the law and pay only what the tax code requires.

In fairness to Romney here, the fact that he has been audited may mean nothing. “Being audited by itself doesn’t mean anything,” Roberton Williams of the nonpartisan Tax Policy Center tells me. “Any audit can result in absolutely no change in taxes. Others can result in many changes. Audits can find lots of mistakes. Some of them are purely mathematic.”

“High income people are more prone to be audited because they have complicated returns that are more prone to mistakes,” Williams continued.

The more interesting part of Romney’s interview may be his answer to the question of whether he has ever paid a tax rate lower than his 2010 rate of 13.9 percent. Romney frames his answer as a choice between having followed the law, and having paid a tax rate lower than that. But experts believe that there are plenty of legal ways Romney may have paid a lower rate, perhaps a significantly lower one, and that this may be a reason he has not released his returns.

“Tax avoidance is not the same thing as tax evasion,” Williams says. In other words, Romney may have followed the law scrupulously while also paying a lower tax rate, which — despite being entirely above board legally — could be difficult to explain politically.

In the ABC interview, Romney said he was happy to “go back and look” to see if he’s ever paid a lower rate. Time will tell whether he actually will go through with this, but even if he does, it’s obviously not the same as releasing the returns themselves. Until Romney does that, all of this is speculation.

By  |  12:35 PM ET, 07/30/2012

 
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