Geithner's previous failure to pay taxes is disclosed

WASHINGTON — President-elect Barack Obama's choice to run the Treasury Department and lead the nation's economic rescue failed to pay $34,000 in taxes from 2001 to 2004, but the last-minute disclosure didn't stop Senate Democrats from proceeding with his nomination.

And one prominent GOP senator, Orrin Hatch, of Utah, said he still supports Timothy Geithner's appointment.

Geithner paid most of the past-due taxes days before Obama announced his choice in November, according to materials released by the Senate Finance Committee considering his nomination. He had paid the remainder of the taxes in 2006, after the IRS sent him a bill.

The still-unpaid taxes were discovered by Obama's transition team while investigating Geithner's background. Obama's staff told senators about the tax issues Dec. 5.

Finance Committee Chairman Max Baucus, D-Mont., said he still hoped Geithner could be confirmed on Inauguration Day, asking senators for unanimous consent to skirt rules and schedule a hearing as early as Friday.

"These errors were not intentional; they were honest mistakes," Baucus said after he and other committee members met with Geithner behind closed doors on Tuesday.

But the committee's ranking Republican, Iowa Sen. Chuck Grassley, hasn't conceded to Baucus' request for a quick hearing. Grassley believes the revelations are "serious, and whether or not it's disqualifying is to be determined," spokeswoman Jill Kozeny said.

But Hatch, another committee member, said he still supports the nominee.

"I have no problem," Hatch told Fox News. "He's a very, very competent guy."

After senators met with Geithner, the panel released 30 pages of documents detailing his tax errors — and also how he came to employ a housekeeper whose legal immigrant work status had briefly lapsed in 2005.

Senate Majority Leader Harry Reid, D-Nev., dismissed the events as "a few little hiccups," and said he was "not concerned at all" about the impact.

Obama reiterated his support for Geithner.

"He's dedicated his career to our country and served with honor, intelligence and distinction," incoming White House spokesman Robert Gibbs said. "That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed."

Geithner, plucked from his job as president of the Federal Reserve Bank of New York to serve as Obama's treasury secretary, told transition officials and senators that he didn't know he owed self-employment taxes when he worked for the International Monetary Fund.

He failed to pay self-employment taxes for money he earned while working for IMF from 2001 to 2003, according to materials released by the Senate committee. In 2006, the IRS notified him that he owed $14,847 in self-employment taxes and $1,885 in interest from 2003 and 2004, which he paid after an audit. The IRS waived penalties for those tax years.

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