Killefer

In one day, President Barack Obama lost two of his cabinet picks, who took themselves out of the running because of tax problems. Somehow, the most vetted cabinet nominees passed muster despite some pretty big tax issues in their past. Treasury Secretary Timothy Geithner survived the confirmation process despite his failure to pay $34,000 in self-employment taxes between 2001 and 2004. (He has since paid them.) Perhaps because of the Geithner flap, Obama's pick for White House performance office, Nancy Killefer (nanny tax issue), and his Health and Human Services choice, Tom Daschle (unreported taxable income), decided they could not weather more tax scrutiny and embarrass the president in the process.

There are lessons here for all of us, of course. Clearly, most of us will never be nominated for a cabinet-level position, but if we were to approach our taxes as if we were, we'd be sure to avoid problems with the Internal Revenue Service. As New York Times Your Money columnist Ron Lieber says, "by adopting a conservative, even paranoid, approach, you will improve your odds of avoiding the tax problems President Obama's appointees encountered."

Here are some lessons learned from the high-profile appointees and how to avoid similar tax issues: Read More »

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