Tax professionals have doubts about Romney's tax returns [View all]

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Tax professionals have doubts about Romney's tax returns

by Christian Dem in NC

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If so, Romney would still have to pay taxes on the real value of the assets when they're withdrawn from the account.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.

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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?

http://www.dailykos.com/story/2012/07/19/1111836/-Tax-professionals-have-doubts-about-Romney-s-tax-returns