Obama's Trade Pick Owes IRS $10,000

Former Dallas mayor Ron Kirk has agreed to file amended returns.
Former Dallas mayor Ron Kirk has agreed to file amended returns. (Lawrence Jackson - AP)
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By Michael D. Shear
Washington Post Staff Writer
Tuesday, March 3, 2009

Former Dallas mayor Ron Kirk, who is President Obama's nominee to be the U.S. trade representative, failed to pay almost $10,000 in taxes during the past three years because of a series of mistakes, the Senate Finance Committee said yesterday.

Kirk's errors involved honoraria from speeches, on which he should have paid taxes; the cost of sports games, for which he deducted too much; and improper treatment of accounting fees on his income taxes. Kirk has agreed to file amended returns.

His major mistake was in not treating as taxable income $37,500 in speaking fees. Kirk asked that the fees be paid directly to his alma mater for a scholarship fund he had created, and his accountant did not think the donated fees were taxable income, the committee said.

An Obama spokesman declared the issues "minor" and said the administration is confident that the nomination is on track for a scheduled hearing Monday with the Finance Committee.

"We are confident that Mayor Kirk will be confirmed," spokesman Ben LaBolt said. "The president nominated Mayor Kirk because of his proven ability at the negotiating table -- building consensus between opposing stakeholders in Dallas and crafting deals to create opportunities for U.S. businesses overseas."

The news about Kirk's mistakes comes after the nominations of several high-profile appointees were threatened or derailed because of tax errors.

Former senator Thomas A. Daschle (D-S.D.) was forced to abandon his bid to be secretary of health and human services after revelations that he had failed to pay taxes on his use of a chauffeur. Obama's choice to be the country's chief performance officer, Nancy Killefer, withdrew because of a failure to pay a small amount of employment taxes.

And Timothy F. Geithner was confirmed as Treasury secretary after acknowledging he had paid more than $40,000 in back employment taxes and interest only after being chosen to lead the department.

Obama announced Kirk's nomination on Dec. 19, the final Cabinet choice before Inauguration Day. The former mayor's nomination has languished since then for unspecified reasons even as other Cabinet nominees testified before the Senate and were confirmed.

Kirk, who would become the fourth African American in the Obama Cabinet, served six years as Dallas mayor before launching a losing bid against Republican John Cornyn for the seat of retiring Sen. Phil Gramm (R).

Kirk did not respond to several requests for comment left on his phone and by e-mail. The Finance Committee released its findings about Kirk's taxes after a meeting yesterday.

"It is the responsibility of the Finance Committee to conduct a thorough vetting of all nominees whose confirmations fall under our jurisdiction," the committee said in a statement. "The Committee produced this report and conducted a briefing for the staff of Committee members today to ensure the appropriate level of transparency and to ensure senators are fully informed and are able to assess the relevant information before the panel considers Mr. Kirk's nomination next Monday."

But the Democratic chairman of the committee, Sen. Max Baucus (Mont.), released his own statement affirming his support for Kirk. "Mayor Kirk is the right person for this job and I will work to move his nomination quickly," Baucus said.

Baucus's Republican counterpart, Sen. Charles E. Grassley (Iowa), will "reserve judgment" until a hearing is completed, said his spokeswoman, Jill Gerber.

Kirk's failure to pay taxes on the honoraria amounted to a $5,800 underpayment, according to the committee, which concluded that he should have accepted the payments, paid taxes on them and then made his charitable contributions.

The committee said he also deducted too much from his taxes for the purchase of season tickets to Dallas Mavericks professional basketball games.

Staff writer Philip Rucker contributed to this report.

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