Trade nominee owes taxes

Ex-Dallas mayor facing scrutiny

Ron Kirk owes about $10,000 in back taxes. Ron Kirk owes about $10,000 in back taxes.
Associated Press / March 3, 2009
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WASHINGTON - Another Obama administration nominee has tax troubles. This time, it's Ron Kirk, the president's choice to be US trade representative.

Kirk owes an estimated $10,000 in back taxes from earlier in the decade and has agreed to pay them, the Senate Finance Committee said yesterday.

The committee said the taxes arise from Kirk's handling of speaking fees he donated to a scholarship fund that he set up at his alma mater, and for his deduction of the full cost of season tickets to the Dallas Mavericks professional basketball team.

Kirk also agreed to make changes in his accounting of charitable deductions, including reducing the claimed value of a donated television from $3,000 to $1,500.

White House spokesman Ben LaBolt said Kirk was working to clear up "a few minor issues" uncovered by the committee and expressed confidence he would be confirmed.

Despite the error, Senator Max Baucus, a Montana Democrat and chairman of the Senate Finance Committee, issued a statement calling Kirk "the right person for this job," and said he would attempt to have the nomination moved through the panel quickly.

Kirk agreed to file an amended tax return this week, according to Baucus's office.

Senator Charles Grassley of Iowa, the top Republican on the committee, said through an aide that he is reserving judgment until the vetting process on Kirk is complete. Kirk is scheduled to testify at a confirmation hearing next Monday.

The former Dallas mayor is the fourth nominee of President Obama's to run into tax problems.

A third of the Senate voted against Timothy Geithner's confirmation as treasury secretary after it was disclosed that he had to pay more than $34,000 in back taxes and interest on income he made while working for the International Monetary Fund.

Former Senate majority leader Tom Daschle then withdrew as a nominee to become health and human services secretary after it was disclosed that he failed to pay $128,000 in taxes.

Nancy Killefer, Obama's pick for chief performance officer, also bowed out amid tax problems.

Kirk's tax problems arise out of speaking fees that he routinely paid directly to Austin College to support a scholarship fund but did not list on his tax returns, according to the Finance Committee report.

The panel said Kirk should have listed the fees as income and claimed them as charitable donations.

Last fall, the Internal Revenue Service notified Kirk that he had failed to report a $5,000 speaking fee, as well as dividend income of $816, from 2006. Kirk paid $2,327 in back taxes and interest in October, the report said.

The disclosure led to questions from the Finance Committee aides, who found that Kirk had also failed to report a total of $37,750 in fees from about 16 speaking engagements from 2004 through 2007.

The estimated effect was to reduce Kirk's tax bill by $5,800, according to the committee report.

Kirk also deducted more than $17,000 as entertainment expenses for the cost of Mavericks' tickets.

The committee said he substantiated about $9,900 of that amount, and will owe about $2,600 in taxes on the balance.

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