Skip to main content

This morning's Morning Edition led off with a story that asks some pretty brutal questions about Mitt Romney's tax returns.  Romney has been adamant that his 2010 and 2011 returns are all the public will get.  But a couple of tax professionals looked at Romney's 2010 return and saw a lot in there that raised their eyebrows.

Lee Sheppard of the journal Tax Notes and Southern Cal law professor Lee Kleinbard were somewhat skeptical about the massive size of Romney's IRA.  It's worth at least $21 million, and Sheppard and Kleinbard don't know how Romney could have gotten that much in the account since he could only legally put $30,000 per year in it.

"Either Gov. Romney is sort of the modern-day equivalent of Jack and his magic beans, who somehow created a mighty beanstalk, or he took a very aggressive position with respect to valuing insider stock," Kleinbard says.

Kleinbard means that Romney might have loaded up his retirement account with assets from his private equity firm, Bain Capital, and assigned artificially low values to those assets in order to get around the federal contribution limits.

If so, Romney would still have to pay taxes on the real value of the assets when they're withdrawn from the account. But in the meantime, the money can grow tax-free. Tax Notes' Sheppard says that's an advantage most taxpayers don't have.

"If you happen to work for a partnership and your compensation is arranged this way, you get this very beneficial treatment," Sheppard says.

That's a question we really can't answer with just two years of returns.

Kleinbard also had some questions about Romney's tenure as chairman of the audit committee at Marriott--whose founder, J. Willard Marriott, was Romney's namesake.  The hotel giant has a reputation among tax experts for going after tax shelters like a moth goes to a flame.  According to Bloomberg, back in 1994 Marriott created a tax shelter called "Son of BOSS" designed to create paper losses in order to offset taxes.  The IRS challenged it, and in 2009 a court threw it out--costing Marriott $29 million in back taxes.  Kleinbard thinks Romney shouldn't have signed off on setting up this shelter.

"It's the job of the chair of the audit committee of Marriott to say, 'Hey, wait a minute, just because we have an opinion from Winkin', Blinkin' and Nod saying that this is a terribly clever idea, I need to apply some common sense as opposed to just signing on the bottom line,' " Kleinbard says.

A statement from Marriott says the company only engages in tax deals it believes are lawful.

"Marriott only engages in transactions that we believe are in accordance with the tax code and that we think will create shareholder value," it said.

The Bloomberg story highlights another Romney-approved tax strategy that drew the IRS' ire.  From 2000 to 2002, it took $1 billion in deductions from an employee stock-purchase plan.  The IRS objected, and in 2007 Marriott had to pay $220 million in back taxes.

Romney has staked his campaign on his business record.  But with this much evidence of his questionable handling of taxes, can we really trust him with our money?

Originally posted to Christian Dem in NC on Thu Jul 19, 2012 at 03:01 PM PDT.

Also republished by The Bain Files.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Sharoney, Renee, Thumb, Grassroots Mom, Joe Bob, Sylv, Alfred E Newman, DeminNewJ, TXdem, Mogolori, filkertom, MadRuth, loretta, hester, grollen, importer, wytcld, newjeffct, Emerson, Shockwave, Heimyankel, LynChi, egoldstein, donna in evanston, Wintermute, cotterperson, SanJoseLady, hyperstation, jdld, Mnemosyne, TX Unmuzzled, freelunch, SallyCat, Ahianne, Poika, hubcap, Creosote, dweb8231, Heart of the Rockies, opinionated, concernedamerican, bronte17, Zinman, justme, mbayrob, annrose, nyceve, rhp, twcollier, highacidity, Bionic, mrblifil, Torta, MJB, itskevin, Nate Roberts, librarianman, Cedwyn, antirove, Yil, revsue, jdmorg, Lilyvt, Redfire, kharma, Getreal1246, psnyder, TexDem, pat bunny, virginislandsguy, yet another liberal, astronautagogo, laughingriver, Catte Nappe, lcrp, riverlover, Matt Esler, Noisy Democrat, peterj911, Sembtex, Hillbilly Dem, jcrit, Emmy, vacantlook, AaronBa, Josiah Bartlett, Sassy, Gowrie Gal, davidkc, nailbender, CPT Doom, humphrey, ExStr8, maybeeso in michigan, bloomer 101, Bluesee, Tinfoil Hat, DianeNYS, jfdunphy, UncleCharlie, caul, LarisaW, auditor, revbludge, SherwoodB, PBen, Flint, mike101, JohnB47, kitchen sink think tank, ccasas, dewtx, reflectionsv37, eru, owlbear1, Beetwasher, majcmb1, SaraBeth, Gordon20024, markdd, Carnivorous Plantling, Sandino, ord avg guy, kaliope, PinHole, SBandini, Savvy813, Ginny in CO, sodalis, bookwoman, Unduna, peacestpete, Ekaterin, Alan Arizona, kathny, forbodyandmind, martini, third Party please, LeftOverAmerica, Shirl In Idaho, gwilson, LeighAnn, 417els, edwardssl, BlueInARedState, hungrycoyote, Gorette, Yellow Canary, deha, rhetoricus, arlene, Son of a Cat, Lefty Coaster, MJ via Chicago, global citizen, StrayCat, Rosaura, real world chick, JVolvo, tommyfocus2003, doinaheckuvanutjob, AllDemsOnBoard, hlsmlane, Pilgrim X, llbear, SingerInTheChoir, BlueMississippi, profh, Mae, BB10, Texdude50, means are the ends, blueoregon, Statusquomustgo, kurious, matx, Friend of the court, AllanTBG, Nulwee, hooper, camlbacker, gloriana, puakev, edsbrooklyn, HeartlandLiberal, Matt Z, terabytes, joedemocrat, Seneca Doane, Kentucky Kid, jayden, jedennis, cyncynical, SeaTurtle, millwood, Bridge Master, jhop7, Wreck Smurfy, uciguy30, madgranny, M Sullivan, janatallow, A Person, cloudbustingkid, trueblueliberal, sable, vet, TomP, Empower Ink, chicago minx, gizmo59, rmonroe, JDWolverton, jwinIL14, MKinTN, JayC, hkorens, windje, Argyrios, TX Freethinker, HappyinNM, wayoutinthestix, Steve15, mamamedusa, Sixty Something, Youffraita, Foundmyvoice, NewDealer, bythesea, elwior, Laughing Vergil, Akonitum, jamess, Therapy, Greasy Grant, rssrai, Cassandra Waites, smartdemmg, Jeff Y, home solar, Gemina13, Horsefeathers, glendaw271, petulans, Notreadytobenice, luckylizard, Karl Rover, JPax, dmhlt 66, jeffhauser, statsone, LKC, clent, bluebelle7, MrsTarquinBiscuitbarrel, maggiejean, prettygirlxoxoxo, enemy of the people, Bule Betawi, multilee, Darmok, Fogiv, Kansas Born, litoralis, greengemini, Scott Wooledge, bobatkinson, Carol in San Antonio, CanyonWren, janmtairy, jacurtz, jennylind, shopkeeper, pvmuse, CamillesDad1, DefendOurConstitution, geebeebee, papahaha, Shelley99, Keith Pickering, histOries Marko, IDrankWhat, 57andFemale, Knarfc, Tortmaster, jfromga, nancat357, jan0080, astral66, BlueOak, Railfan, bronxcharlie, brentbent, coppercelt, mamamorgaine, The Distillery, confitesprit, marabout40, NMDad, KroneckerD, willynel, TFinSF, roadbear, NJpeach, eXtina, on board 47, Anima, klompendanser, Crabby Abbey, Lost and Found, ATFILLINOIS, RJP9999, Eddie L, pixxer, ItsSimpleSimon, laserhaas, Puddytat, sharonsz, elengul, MsGrin, BlueFranco, ericlewis0, Floande, debk, petesmom, science nerd, Actbriniel, slice, theKgirls, BrowniesAreGood, redlum jak, TAH from SLC, kerflooey, MidwestTreeHugger, Dretutz, kayak58, ozsea1, StateofEuphoria, ban nock, slowbutsure, sostos, anyname, FarWestGirl, OhioNatureMom, cleduc2, Nicci August, Teiresias70, CoExistNow, trumpeter, Haf2Read, marleycat, PorridgeGun, zukesgirl64, Cinnamon Rollover, Jasonhouse, BarackStarObama, rk2, SueM1121, floridablue, 1718bill, merrily1000, Grandma Susie, MRA NY, sound of progress, Imhotepsings, Caddis Fly, Andrew F Cockburn, beforedawn, Vatexia, Hayate Yagami, SteelerGrrl, Book of Hearts, rscopes, Sunspots, stlsophos, joanbrooker, thejoshuablog, DRo, Mentatmark, CoyoteMarti, BoulderStevo, caryltoo, DEMonrat ankle biter, ParkRanger, Davui, ArtemisBSG, No one gets out alive, YaNevaNo, AnnetteK, Only Needs a Beat, weatherdude, Prairie D, Liberal Granny, anodnhajo, Siri, Citizenpower, foucaultspendulum, ahumbleopinion, Xkeeper, a2nite, Deep Texan, congenitalefty, Horace Boothroyd III, stellaluna, This old man, mapamp, peachcreek, hotheadCA, AspenFern, Spirit Dancer, Nztorg, Arahahex, pittie70, Buckeye54, dfwlibrarian, sexgenderbody, cassandracarolina, james321, Vote4Obamain2012, Kinak, Glen The Plumber, Kayjay, databob, Portlaw, CalBearMom, Dumas EagerSeton, Blue Bell Bookworm, nomandates, DamselleFly, broths, Southcoast Luna, entrelac, parsonsbeach, sweetsister, howabout, Icicle68, Smoh, Avilyn, NotAhab, ET3117, Occam was an optimist

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site