Sebelius admits errors,
pays $7,000 in back taxes
By ERICA WERNER
The Associated Press
Tuesday, March 31,
2009; 8:06 PM
WASHINGTON -- Health and Human Services nominee Kathleen Sebelius recently
corrected three years of tax returns and paid more than $7,000 in back taxes
after finding "unintentional errors" _ the latest tax troubles for an Obama
administration nominee. The Kansas governor explained the changes to senators in
a letter dated Tuesday that the administration released. She said they involved
charitable contributions, the sale of a home and business expenses.
Sebelius said she filed the amended returns as soon as the errors were
discovered by an accountant she hired to scrub her taxes in preparation for her
confirmation hearings. She and her husband, Gary, a federal magistrate judge in
Kansas, paid a total of $7,040 in back taxes and $878 in interest to amend
returns from 2005-2007.
Several Obama administration nominees have run into tax troubles, notably the
president's first nominee for HHS secretary, former Senate Democratic leader Tom
Daschle. He withdrew from consideration while apologizing for failing to pay
$140,000 in taxes and interest.
Finance Committee Chairman Max Baucus, D-Mont., quickly issued a statement supporting
Sebelius.
"Congress is going to need a strong partner at the Department of Health and
Human Services to achieve comprehensive health reform this year, and we have
that partner in Gov. Sebelius," Baucus said. "There is absolutely no doubt in my
mind that Gov. Sebelius has the political experience, determination, and
bipartisan work ethic to get the job done with Congress this year. She's the
right person for the job."
There was no comment from the White House.
Sebelius is to appear Thursday before Baucus' committee, which will vote on
sending her nomination to the full Senate. Sebelius testified Tuesday before the
Senate's Health, Education, Labor and Pensions Committee before the tax issue
became public, getting a friendly reception.
Sen. Chuck Grassley of Iowa, the top Republican on the Finance Committee,
said through a spokeswoman that he is reserving judgment until the vetting
process, including the nomination hearing, is completed.
In her letter to Baucus and Grassley, Sebelius wrote that the accountant
discovered these errors:
_Charitable contributions over $250 are supposed to include an acknowledgment
letter from the charity in order for a deduction to be taken. Out of 49
charitable contributions made, three letters couldn't be found.
_Sebelius and her husband took deductions for mortgage interest that they
weren't entitled to. The couple sold their home in 2006 for less than what they
owed on the mortgage. They continued to make payments on the mortgage, including
interest. But since they no longer owned the home they weren't entitled to take
deductions for the interest. The same thing happened with a home improvement
loan. Sebelius said they "mistakenly believed" the payments were still
deductible.
_Insufficient documentation was found for some business expense deductions.
An administration official said Sebelius filed the amended returns before
documents formalizing her nomination were sent to the Finance Committee.
Sebelius advised the committee of the mistakes, and senators requested an
explanation, said the official, speaking on condition of anonymity because of
the sensitivity of the issue.
In a letter to Sebelius dated Tuesday, Baucus and Grassley wrote that they'd
reviewed the three years of amended returns and "no additional items were
identified that needed to be addressed."
___
Associated Press writer Ricardo Alonso-Zaldivar contributed to this report.
© 2009 The
Associated Press