Yet another Obama nominee owes back taxes

Why do so many of President Obama's cabinet nominees owe taxes? It's mind-boggling, at least to this member of the liberal media elite who campaigned for the former senator from Illinois.

Kathleen Sebelius became the fifth Obama nominee to admit to owing money to Uncle Sam. The Kansas governor, who was picked to be Secretary of Health and Human Services, told the the Senate that she and her husband made "minor (and) unintentional" errors in their taxes. They amended their returns from 2005 to 2007 and paid $7,040 in back taxes plus $878 in interest.

"In July of 2006, my husband and I sold our home for an amount less than the outstanding balance on our mortgage," she wrote in a letter. "We continued paying off the loan, including interest we mistakenly believed continued to be deductible mortgage interest. Another loan for home improvements was treated similarly."

John W. Roth, senior tax analyst at tax information firm CCH Inc., said the issue with the home sale is very unusual. People in that situation try to sell their homes through a short sale which for a price lower than the amount of the mortgages. Many people are confused by the rules regarding home interest rules, he said.

The Sebeliuses also failed to provide sufficient documentation for business expenses and charitable deductions. It was not clear whether the Sebelius and her husband prepared their own tax returns or hired a CPA. Some wealthy people such as Treasury Secretary Tim Geithner used tax preparation software.

In an interview, Roth said he was "amazed" by how many Obama nominees have been tripped up by "pretty silly mistakes." He added that the Sebeliuses could still be hit with penalties though the IRS may cut them a break since they reported the errors themselves.

Predictably, Democrats are backing her and Senate Finance Committee Chair Max Baucus has expressed support for Sebelius. His Republican counterpart Sen. Chuck Grassley was non-committal. Spokespersons for Baucus and Grassley could not be reached for comment.

Though an administration official told The Wall Street Journal that the errors are minor and should not hold up her nomination, that misses the point. Most people pay their taxes on time and in full. Given the current economic environment, many people believe the rich get off easier from the IRS than us working stiffs. The cynicism has some justification.

Audits of taxpayers with $1 million or more in income fell by one-third last year despite the IRS' claims that it cracked down on wealthier taxpayers. The IRS disagrees with the conclusions of an independent researcher, according to USA Today.

There is no doubt that the tax code is overly complex.

A survey of more than 1,000 U.S. adults by CCH Inc. found that nearly 66 percent of taxpayers fear they may overlook tax breaks or make mistakes that could cost them in fines or penalties. "At the same time, most taxpayers also were unable to determine which tax breaks may be most beneficial, indicating their concerns about costly oversights or mistakes may be well founded," CCH said.

Still, we can't allow the rich to avoid paying taxes because they were confused. Everybody has to pay taxes whether they like to or not.

By the way, Sebelius replaces Obama's first choice for the job Tom Daschle who withdrew for -- what else -- tax problems.

Driving for Lyft? Use This Tax Preparation Checklist

So, you decided to become your own boss (at least part-time) and start driving for a ride-sharing company like Lyft. Use the Lyft tax preparation checklist below to organize your income and deductions to make filing your taxes a breeze. Remember, not all items listed will apply to you, but it will give you a good idea on what you need to report as income and what you can claim as a deduction.

Read More

Brought to you by TurboTax.com

Video: The Alternative Minimum Tax (AMT) Explained

Originally created to make sure the wealthy paid taxes even after using tax breaks and loopholes, the Alternative Minimum Tax (AMT) has never been updated and continues to impact middle class Americans more and more each year as a result of inflation. To compensate for inflation, the AMT now includes an exemption amount. This exemption is indexed for inflation so it changes every year.

Read More

Brought to you by TurboTax.com

Energy Tax Credit: Which Home Improvements Qualify?

Taxpayers who upgrade their homes to make use of renewable energy may be eligible for a tax credit to offset some of the costs. As of the 2018 tax year, the federal government offers the Nonbusiness Energy Property Credit. The credits are good through 2019 and then are reduced each year through the end of 2021. Claim the credits by filing Form 5695 with your tax return.

Read More

Brought to you by TurboTax.com

Top 5 Reasons to File Your Taxes Early

Every April, many taxpayers wait until the last minute to file their federal income tax returns. Despite this tendency, there are many reasons to file your taxes early. If you will receive a refund, you may want to submit your return as quickly as possible. Additionally, there are benefits to filing early for those taxpayers who have a balance due.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.