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Geithner faces tax questions

The Treasury Secretary nominee is probed on the immigration status of a housekeeper and failure to pay taxes for work at the International Monetary Fund.

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By Ed Henry, CNN senior White House correspondent

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WASHINGTON (CNN) -- Members of the Senate Finance Committee met Tuesday with Treasury Secretary nominee Tim Geithner over concerns involving his personal taxes and the immigration status of a former housekeeper, transition officials said.

The Geithners employed for about a year a housekeeper whose employment authorization document expired about three months before she stopped working for them in October 2005, according to a written statement from the Senate Finance Committee.

Later, the housekeeper, who is married to a U.S. citizen, was granted a green card, transition officials said.

The second concern involves Geithner's taxes while he worked for the International Monetary Fund. According to a statement released by the committee, Geithner failed to pay self-employment taxes while IMF paid him from 2001 to 2004.

In 2006, the Internal Revenue Service audited Geithner for tax years 2003 and 2004, and he paid $16,732 for the taxes and interest for those years, the statement said. After Obama nominated him for treasury secretary, Geithner voluntarily amended his taxes for 2001 and 2002, paying $25,970 for those taxes and interest, the committee said.

The presidential transition team told Finance Committee staff about Geithner's taxes early last month, the committee said.

As an international organization, the IMF does not withhold money from employees' paychecks to pay Social Security and Medicare. U.S. employees are required to pay them on their own.

Robert Gibbs, the incoming White House spokesman, called Geithner's tax issue a "common mistake."

"The President-elect chose Tim Geithner to be his Treasury Secretary because he's the right person to help lead our economic recovery during these challenging times," Gibbs said in a written statement. "He's dedicated his career to our country and served with honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed."

The Finance Committee said it would continue to review Geithner's tax returns and other information ahead of a nomination hearing.

"When errors or issues of concern are discovered, transparency is vital to allow members of the Committee and the entire Senate to fully review and assess the relevant information before hearings and votes occur," the committee said in a written statement.

"I believe that these errors, although serious, do not rise to the level of disqualification. He is an extremely competent man," said Committee Chairman Max Baucus, D-Mont. "The errors were, in my judgment, honest mistakes. He did not in any way intentionally make those mistakes."

Sen. Charles Schumer, D-N.Y., also said the mistakes were "not at all disqualifying."

"Tim came to the committee, admitted he had made some mistakes, and was very contrite," he said in a written statement. "I continue to strongly support his nomination and given the tough economic conditions, hope we can confirm him as quickly as possible." To top of page

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