Republican presidential candidate Mitt Romney has a problem.
People really want to see his tax returns. The normal convention is that presidential candidates release around 10 years of tax returns. Romney has released only last year and an estimate for this year. Romney doesn’t want to release any other returns. He won’t.
Candidates usually release their returns. I suppose that’s for transparency’s sake. Romney doesn’t want to release them because he says his opponents will use information in those returns against him. Either way, he has a PR problem and in most situations the best advice is to release the information. Get the truth out there. People will forgive you and the media will move on to another story.
That’s not the point. I’m sure the usual crisis rules apply. Release the info and eventually the issue will go away. Romney MUST believe that the tax returns contain some information that is a bigger shit storm than the PR problem.
So what is it? It is known that Romney has tax shelters. I’m sure they’re legal entities and all that jazz. People probably wouldn’t mind too much that he has tax shelters. That’s more of a structural issue with the tax code and tax equity. Sure it doesn’t seen fair to use tax shelters, but no one is going to really crucify him for using them.
It has to be something worse.
So, while I was watching cable news, I came across an interesting idea and it connects to . . . ME.
Last summer I had an internship with the IRS. I was in their LB&I division. The LB stands for large business and the I stands for International. Most of my internship was with the I part. The team I was with was focused on an amnesty program for high income tax filers that failed to disclose income from foreign accounts/sources.
In exchange for agreeing to not pursue criminal charges, high income tax filers would extend the statute of limitations on their tax return audits and re-file their tax return with the foreign source income. They also agreed to pay back taxes and a bunch of fees and penalties.
The point is, this was so people with lost of money would pay taxes on money they were hiding.
So, maybe, just maybe, Romney participated, or filed to participate but didn’t go through with it, or wanted to participate but was rejected from the program. By filing for the program, Romney is implicitly stating that he WAS NOT PAYING his legally required share of taxes.
And! That is a problem.
Romney justifies his last year’s 15% tax rate as him paying what is legally required. But maybe some time in those last 10 years, he DIDN’T PAY WHAT WAS LEGALLY REQUIRED.
That would hurt.