IRS Files Tax Lien Against Schwarzenegger (Updated)
[Guest post by DRJ]
The LA Times reports TMZ.com has obtained a copy of an IRS tax lien filed for $79,064 against California Governor Arnold Schwarzenegger for unpaid 2004-2005 tax penalties:
“Public records show the lien was filed May 11 at the Los Angeles County recorder’s office for $79,064, according to a record in an electronic database that includes lien filings. The record lists the debtor as Arnold Schwarzenegger and the address as the governor’s home address in Brentwood.
The lien was reported Friday by TMZ.com, which posted a copy of a lien document that says it is from the county recorder’s office. That document shows that Schwarzenegger owes $39,047.20 from 2004 and $40,016.80 from 2005.
The document also lists a section of the IRS code that suggests the debt may be penalties for a failure to report certain business transactions.”
The Governor’s spokesman says it’s a “a minor paperwork tracking discrepancy” that will be quickly cleared up with no penalty. He also claimed it is “completely unrelated to the payment of taxes, which the governor has paid in full and on time.”
Really? The tax lien was reportedly filed in May 2009, so that’s not quick in my book. It appears to cover unpaid 2004-2005 penalties levied pursuant to IRS Code Section 6721 (“a payor may be subject to a penalty for failure to file a complete and correct information return with the Internal Revenue Service”). The last time I looked, tax penalties were still part of the tax system.
Granted, this may not be a big deal to the Governor but it would be to most people.
— DRJ
UPDATE 11/30/2009 — The Governor’s business manager explains:
“Schwarzenegger’s tax returns used his Social Security Number. The payroll forms used an employer identification number. For some reason, in 2004 and 2005 only, the two federal agencies that received those documents were unable to recognize that the forms were filed by the same taxpayer. *** The amounts the IRS said Schwarzenegger owed were penalties for his supposed failure to file those forms.
In another odd twist, [business manager] Wachter said, IRS warning notices were sent to the governor’s home instead of to his business office or to his accountants, where his mail normally goes. But the post office is under instructions not to deliver mail to the governor’s home. So the notices went back to the IRS.”
I’m still not sure why the tax preparer/business manager would file employee withholding and related forms under Schwarzenegger’s personal SS# instead of the Employer ID#.
This is only proof of Arnold’s suitability for the Obama administration. He’s obviously destined for the cabinet.
SPQR (26be8b) — 11/28/2009 @ 1:31 pmI’m sorry, but wasn’t Governator Schwarzenegger one of those who told y’all that you needed to vote for the Proposition 1A tax increase, or things would really get bad in the Pyrite State? And this lien was filed on May 11th, which was what, just eight days before that special election?
Perhaps Treasury Secretary Tim Geithner will have a job open for the Governator.
The Dana who smells hypocrisy here (474dfc) — 11/28/2009 @ 1:31 pmThe IRS is made of evil.
happyfeet (0003d3) — 11/28/2009 @ 1:36 pmHaving dealt with the IRS since 1978 they never file a tax lien quickly unless they think the assets will evaporate in the near future. And I doubt that this is the situation here.
Most likely the IRS got tired of being jerked around by Arnold’s advisors. Maybe Obama promised him a spot in his Cabinet and assured him that was the easiest way to get rid of those pesky tax problems.
MU789 (4e85ea) — 11/28/2009 @ 1:41 pm[…] IRS Files Tax Lien Against Schwarzenegger Filed under: General — DRJ @ 1:19 pm […]
Common Sense Political Thought » Blog Archive » More hypocrisy: another politician who urged higher taxes didn’t pay all of his own (73d96f) — 11/28/2009 @ 2:15 pmArnold’s a nice guy. I’m sure this is just an innocent mistake. Those things can happen to anyone.
Charlie Rangel (718861) — 11/28/2009 @ 2:34 pmYes, it’s not like he was salting away some cold cash.
Jefferson, Wlm. #09-107539 (764e2c) — 11/28/2009 @ 2:42 pm#7
LOL!
Dave Surls (398876) — 11/28/2009 @ 2:46 pmJust because the dates are from 2004 and 2005 doesn’t mean that the governor knew about it until after an audit was concluded.
It is also possible that the IRS sent letters saying they were owed $xxxxxx for 2004 and $xxxxxx for 2005.
I’ve gotten those and my accountant sent them a letter that politely said “you are wrong, please check your math”
When the IRS kept at it they got another letter saying they were still wrong.
Then I get a letter wanting an audit and my accountant sends me too a professional representative who sends the IRS a letter to refer all correspondence to their office and not to contact me without them being present.
After that, if there is an audit, my representation will try to limit the scope to what is pertinent to the specified dispute so the IRS doesn’t go fishing and/or run up my representation costs.
All this takes a lot of time and money.
Last time I went through it, it took a year and a half to clear it up and I owed zero… well except to everyone I hired to represent me (yeah I know some people say your accountant does this for free, but really? You need a specialist for this and let yor accountant do the research and crunch the numbers while the pro fronts it).
Over on instapundit today I think I saw a link to taxprof who showed the IRS got dinged for $330K legal fees for screwing around unethically… which happens
The agent assigned to me contacted me by phone asking questions AFTER being informed that I had representation by phone, FAX and certified mail.
She called and tried to do the Columbo/Monk amiable doofus routine…
Anyway, owners of small but complicated businesses and persons who are themselves sort of a complicated business (like Arnold) run into this crap all the time and the $$$ numbers aren’t all that big.
Plus Arnold works for $1 a year for us here in CA so all this adds up to less than a problem for me
SteveG (97b6b9) — 11/28/2009 @ 2:52 pmStevieG wrote:
Somehow, the fact that the liens were filed just eight days before the Proposition 1 special elections, where the Governator was advocating that everyone else pay higher taxes, ought to have caught his attention. And the fact that he works for $1 a year simply confirms what we already knew: he’s rich, very rich, and could have easily paid those taxes. He could have paid them with a notice of dispute, in which case the money would have been credited to his future taxes if he won.
It’s so easy to do the right thing when you have his kind of money, and he still couldn’t do it.
The unsympathetic Dana (474dfc) — 11/28/2009 @ 3:13 pmExpect to see more and more of this sort of thing from upper level income taxpayers as Democrats shift the overwhelming burden of funding the welfare state to “the rich.”
The numbers are astounding it’s something like 5% of Americans pay 60% of total federal taxes. It’s grossly unfair, it’s a direct violation of the fundamental principle underlying the notion of equality for all. In short, it’s unAmerican to put a higher tax burden on some citizens and at the same time to excuse others from contributing to the common good.
Constant attempts to “tax the rich” will only cause them to seek ways to protect their assets from unfair usurpation. Additionally, the taxes enacted ostensibly to “soak the rich” always seem to visit middle income earners and never go away.
ropelight (92a6ea) — 11/28/2009 @ 5:10 pmAnd, those taxes inexorably benefit those in the political heirarchy who would never be considered middle-class, but reside within that 5%.
AD - RtR/OS! (764e2c) — 11/28/2009 @ 5:31 pm…if not higher!
AD - RtR/OS! (764e2c) — 11/28/2009 @ 5:32 pmThe dates – 10/8/2007 and 8/4/2008 – have me wondering what the assessments are actually for – and how valid they may or may not be … and whether some Congresscritter may have asked the IRS to see what they can do about our Governator …
Since I am guessing that he probably doesn’t do his own taxes, it’s sorta interesting how many here seem happy to blame him so quickly …
He may well deserve most of the prior comments – or the commenters *may* be a tad prejudiced …
So – I’m holding off on judgment until a little more is known about the specifics …
Alasdair (205079) — 11/29/2009 @ 1:06 amAlasdair wrote:
Yes, I absolutely admit to being prejudiced against people who advocate higher taxes on everybody else and don’t pay all of their own taxes. I am proud of that prejudice, and would guess that a lot of other people here would admit to the same prejudice.
The problem is that, for someone like Tim Geithner or Tom Daschle or Arnold Schwarzenegger, millionaires all, there is no actual penalty for their actions. So, they have to pay a few extra dollars if they get caught? Big deal, that’s just pocket change for the Governator. Now, if they were looking at actual time in the federal penitentiary for this stuff, maybe they’d be a little more careful.
Some crackhead waves around a gun and steals $30 and a twelve-pack from the local Seven-Eleven, and we lock him up for five years. A rich politician doesn’t pay tens of thousands of dollars on his taxes, and we send him notices, give him warnings, and then, after a couple of years of him not making good, the IRS puts a lien on some of his property, a lien he can satisfy just by paying up. Yeah, that’s justice!
The urinated-off Dana (474dfc) — 11/29/2009 @ 4:41 amMy point is that sometimes we don’t owe what the IRS says… why take their word for it?
SteveG (97b6b9) — 11/29/2009 @ 1:40 pmSo you fight the IRS and they try to bully you with a lien because they (the IRS) made a decision that you owe $$.
I have no problem paying my share, but I’ll fight if I think I don’t owe what they say I do.
Some of their stuff seems like it was hatched in the mind of a petty bureaucrat accountant who got a 2.5GPA at CS San Berdoo
I’ve updated the post with an explanation from Schwarzenegger’s business manager.
DRJ (dee47d) — 11/30/2009 @ 9:33 pmGood.
Michael Ejercito (6a1582) — 11/30/2009 @ 9:35 pm