Romney’s tax returns

Did Romney take the tax amnesty for people who cheated on their income taxes with concealed foreign bank accounts?

[UPDATE Following is probably wrong; Romney disclosed a UBS money market account way back in 2007. Thanks to an alert reader for spotting the error.]


So Mitt Romney announces at 5:16 on a Friday that he’s filing for an extension on his 2011 tax returns, and Chris Cillizza games out the politics. But Cillizza, along with the rest of the national press corps, is silent on the most explosive possibility: that the Swiss bank account that shows up in the 2009 return hadn’t been disclosed in previous returns, and was reported only as the result of Romney’s accepting the IRS’s amnesty offer for people who had been illegally concealing foreign bank accounts but feared that their names might be among those revealed by UBS in its settlement with the feds.

If that’s true, and it comes out, I think Romney is probably toast: it means that for some number of years Romney signed a tax return containing the false statement that he had no foreign bank account. The voters are unlikely to be understanding.

Of course, it might not be true. But I’m still waiting for any coherent explanation of why Romney thought he needed $3m in a Swiss account.


Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact:

46 thoughts on “Romney’s tax returns”

      1. Switzerland? Sweden? Whatever. One of those countries with a lot of snow and blonde people.
        note to Brett: Switzerland is the country where everybody has a gun and the banks are notorious for shady dealings. Sweden is the country where it’s harder to get guns and the banks are known for a high degree of honesty and transparency. They both have universal health care. ‘Course the whole world has that except, well you know who.

      2. I disagree with Brett quite frequently, but I never suspect him of being either dumb or ignorant. I am confident he knows exactly where Switzerland is.

        I suspect his point is that if Romney owns business interests in Nordic countries it may be much easier to conduct their business in a bank that is set up to deal with routine currency movement denominated in the various national Krone as well as Euros.

        And while we’re on this subject, what the heck business is it of ours *why* he chooses to keep some of his money in a Swiss bank? What’s our business is whether he cheated on his taxes. If used our U.S. Tax Code, in a fully legal way, to his advantage, then if we don’t like it we ought to tell our Congress to change the tax code. Hmmm … seems like I’ve heard a lot of hot air about that for a long time, but I can’t blame Mitt Romney for that.

        1. Thanks for covering for Brett, Ken, even when on the face of it, he made a geography flub.

          If Romney has Swiss bank accounts under purely legal terms, then of course there’s no problem. But his squirrely behavior regarding both his back taxes and his Swiss bank accounts indicates that there may be something fishy in his history. No one is yet saying he’s done anything wrong–only that he should fully disclose all of the information that most candidates for the presidency disclose, in order to avoid the appearance of impropriety.

        2. No Brett isn’t dumb but people confusing Switzerland and Sweden is a running joke, at least with Swedes. It is acommon enough mistake.
          I don’t know squat about international banking but even local banks in the USofA can make international transfers and convert dollars to kroner, euros, swiss francs or whatever you need.
          In poitics apearances matter and keeping money in a bank in a country notorious for secret accounts that tax dodgers use is at best bad judgement on it’s face.

  1. As great as it would be to make toast out of Romney’s ambitions, I’m not able to square this with the fact that he gave 23 years tax returns to the McCain campaign when they were searching for a VP. Any speculations?

      1. Just an idle thought when I saw this comment…

        McCain = maverick from Arizona. Romney = establishment guy from Michigan via Massachussetts.
        McCain = Naval Academy guy with respected military background. Romney = Harvard guy with strong business background.
        McCain = U.S. Senator. Romney = Governor of Massachussetts.

        Looks like a pretty strong candidate team.

        What does it tell us about the collective IQ of the McCain team that they picked Tina Fey over Romney?

        Perhaps it makes us think Romney said “thanx, but no thanx.”

        1. But then why submit the returns at all?

          If you don’t want the job, don’t apply for it.

          1. I should have been so lucky in my life! I’ve had the experience of applying for a job which, after I got into the organization during the interview process, I discovered I didn’t want after all. I doubt it’s a rare event.

    1. Very simple: None of the 23 years of returns that he gave to the McCain campaign revealed foreign bank accounts or income from foreign accounts. After all, foreign banks do not send out 1099’s. Thus, his 23 years of disclosure to the McCain vetters would not have lead to foreign accounts being uncovered.

      In 2009, the IRS had an amnesty program. It required that those seeking amnesty for non-reporting of foreign accounts file amended returns for up to six previous years.

      Can’t some enterprising reporter ask this simple question: “Did Romney, his wife, or any of their trusts seek amnesty under the 2009 amnesty program or either of the two programs that followed the initial program?”

  2. Wasn’t that Anne’s 3 million Swiss bank account?
    If so, my understanding is she cleaned a lot of toilets to make that sort of chump change.
    Also if so, now we no why the world owed Anne an apology. Post haste.
    Why I bet she has lots of callouses on her dishwasher hands….

    1. has to amend previous years returns, which has a ripple effect on the 2011 returns.
      He’s considering spending a year deceased for tax purposes.

      1. Not sure I understand your point.

        I suspect the reason for the extension is more or less what Romney says.

        There’s a lot of information to pull together, and of course he has the extra problem of going over it to be ready to explain anything that looks odd. Besides, if the 2011 return really is embarrassing he would have gotten it out sooner rather than later, since it has to be filed by mid-October regardless.

        1. It’s that fixing up previous year(s) tax returns is difficult work.
          And he’s trying to avoid the embarrassment of releasing the 2010 / 2009 multiple times.

        2. He has the same issues in his returns every year, but he also has professional accountants doing it–this is not a mom-and-pop business struggling with the details of Schedule C (or K). He did not seek extensions in previous years AFAIK. Of course, there is not a whole lot of information on his returns–other than 2010 and 2009. Maybe he just wants to get all the information in: “We wanted to get all the details correctly and cross every t in order to take advantage of the Obama tax cuts.”


  3. Of course, it might not be true. But I’m still waiting for any coherent explanation of why Romney thought he needed $3m in a Swiss account.

    I can’t help but be suspicious about the failure to release the earlier returns also, but I’ll say this about the Swiss account in general:

    1. It’s my impression that Mormons are big on disaster preparation. Would it be wildly out of line to imagine that keeping a sum of money abroad is part of that?

    2. To which I answer, no. In fact, if I had Romney’s wealth I might well set up such an account as well. (The Swiss were ever so helpful, after all, in safeguarding Holocaust survivors’ money. That unpleasantness aside, I’d think seriously about hiding some money somewhere, just in case.)

    That wouldn’t justify lying about it, of course.

    1. As you are of course aware, a big part of the helpfulness of the Swiss in safeguarding the money of victims of the Holocaust was exerted in safeguarding that money from the claims of Holocaust survivors …

      (In other words, I’m pretty sure you were being sarcastic, but I’m not sure I fully apprehended your meaning).

      1. Correct. It was sarcasm, not wholly relevant to the point, but somehow irresistable.

    2. It’s my impression that Mormons are big on disaster preparation. Would it be wildly out of line to imagine that keeping a sum of money abroad is part of that?

      You mean the Republicans have nominated a candidate who has so little faith in the longevity of the US that he feels compelled to squirrel away money in a foreign land?

      (In other words, I’m pretty sure you were being sarcastic, but I’m not sure I fully apprehended your meaning).

    3. Yes on 1. Mormons are not only big on disaster preparedness, but they are also not averse to making a buck selling disaster preparedness to others. The two main freeze-dried food companies that promote with Hannity’s and Beck’s help are both run by Mormons and started out by selling supplies to Mormons. The same is true about other panic-mongering companies (e.g., gold investment), although it’s not as obvious.

      Also yes on 2. I agree completely that when you’re worth a quarter billion dollars, stashing away a measly $3 mil in a foreign bank is nothing. I actually would expect much more than that in foreign accounts, although not all in banks. On the other hand, what arouses suspicion is not merely the fact that it’s a Swiss bank but specifically that it’s UBS–the most aggressive seller of tax-evading vehicles in the world. Well… it was at one time… until they got caught

  4. Hey, maybe if Romney filed a fraudulent tax return and it costs him the election then Obama will appoint him to replace Tim “tax cheat” Geithner as his next Treasury Secretary. Of course this kind of speculation would place you comfortably next to the folks who demanded to see Obama’s birth certificate, Mark. I would think that the reality-based community wouldn’t have time for such conspiracy theories.

  5. Pretty much anyone that invests in hedge funds has to file an extension because they don’t get their K-1s in time. There is absolutely no story to the fact that a guy with this much cash files an extension.

    If something else comes out, yes, that’s a big story. But I think it’s pretty irresponsible to leap from extension to law breaking tax dodger, Mark.

    I’m head and shoulders in the Obama camp for this election, but unless you have some scintilla of evidence to make this speculation, I think a retraction and apology is called for. This is supposed to be the reality based community after all. Of course if you DO have a scintilla of evidence, let’s hear it.

    1. Your reading comprehension seems to have its ebbs and flows. Mark did not connect the “law breaking tax dodge[]” to the extension. The tax dodge would have materialized as an issue in 2009. The 2011 extension is just a hook to hang the question on. But your hedge funds claim would have more air under the wings had the returns been filed late every year. This does not appear to be the case.

      1. Mr. Kleiman wrote a blog post about the fact that Romney filed an extension. He then pointed out that the national press has remained silent on the possibility that Romney broke the law and only got away with it because of an amnesty deal.

        What’s the difference between “making a leap” and “a hook to hang the question on”? I don’t see one.

        He may as well have said, “but Cillizza, along with the rest of the national press corps, is silent on the most explosive possibility: that Mitt Romney was the gunman on the grassy knoll!”

        As I said, if Mr. Kleimann has heard some rumours that Romney did indeed use the amnesty, or an unnamed source tod him so, he should present that information to us and then speculate as to how explosive it is. Without any supporting evidence, he’s just making a false accusation, IMO. It’s irresponsible to say “it’s possible person X committed Y crime” unless you have some evidence this may be so.

        “It’s possible you’re a drug kingpin who’s responsible for the murder of 72 people. Who’s to know?” See how easy that is?

        Regarding the extensions, at least according to Romney and his campaign, he has indeed done this in previous years: “According to Romney’s campaign, he and his wife have done this in previous years.”

        Read more

        So indeed it does “appear to be the case”. But who’s going to believe a lying tax dodger when he says he’s filed for extensions before, right?

        1. This whole brouhaha over an extension is a tempest in a teapot. You don’t “seek” an extension. You don’t ask anybody’s permission, and hope it’s OK. You send in a form and the extension gets filed in the computer.

          You can do it because you’re a lazy procrastinator, or you can do it because you’re waiting for your brokerage to restate your final accounting for the third time, or you can do it because you decided to stay a few weeks extra in Florida after Spring Training ended, or you can do it because you’re busy and you just don’t feel like dealing with it right now. All of those have been reasons for my extensions one year or another, and my returns aren’t even terribly complicated. Looking for significance in an automatic extension is wasting mental energy.

          1. Correct.

            Also, it’s not an exension on payment, just on the return. You have to send in money with the extension form, and if you send less than you end up owing in taxes you will pay penalties and interest on the difference.

  6. I’m head and shoulders in the Obama camp for this election, but unless you have some scintilla of evidence to make this speculation, I think a retraction and apology is called for.

    Given the way Rosen went to her knees and begged forgiveness, does being “head and shoulders” in Obama’s camp mean you are on the reelection payroll too?
    What is it with this nonstop demands to apologize to Richy Rich and kowtow to Dame Anne? The obscenely wealthy don’t need to be coddled, suckered, petted and pampered.

    It is simple: The rich are getting richer, the middle class is hurting, and the poor are off the back of the peleton.
    If one wants to change the tax code back to the way it was in the 50s, 60s, 70s, or 80s you’ve got to rile the masses into voting their economic interests.
    That means squeezing blood out of the Richy Rich turnip. That means propagandizing Mitt’s wealth to the max: WTF Mitt made 21 million in 2010 and didn’t break a sweat, dirty his pants, or break a nail. He didn’t do anything. ANYTHING that is close to being considered work to earn 21 new million dollars…

    And you want Mark to apologize for speculating about this pump-and-dumpers ability to play financial games on his tax return?
    On a blog?
    Get real man.

  7. Suppose Governor Romney did file false tax returns for many years. Would anyone care?

    After all, Clarence Uncle Thomas filed false financial “disclosure” statements for the greater part of his tenure on the Supreme Court, and no one seems to care about that. Could that have been because his wife’s clients were putting a lot of biscuits (and gravy) on the Thomas family breakfast table while such clients’ interests were being litigated before SCOTUS?

    Eric Holder’s Justice Department nevertheless thinks it more important to prosecute one of his boss’s primary election opponents than to investigate whether Mr. Thomas violated 18 U.S.C. § 1001.

    1. What on earth? … There is a vast difference between Mittens and Thomas–Thomas can only be removed by impeachment. Unless there is more to that story (and he “corrected” the record already), that’s not going to happen. No one has to vote for Thomas again for any reason. In Mittens’s case, any actual financial improprieties would have a huge effect at the polls. It’s really that simple.

      1. It is true that Justice Thomas can be removed from office only by impeachment. A federal felony prosecution resulting in conviction, however, would indicate strongly that his conduct fails to comport with “good Behaviour” for purposes of Article III, § 1 of the Constitution. Whether that would matter to the Republicans in the Senate is anybody’s guess. (I suppose that theoretically he could carry out his judicial duties from a prison cell by relying heavily on clerks; his presence at oral arguments is superflous, anyway.)

        Thomas may be tough enough to walk away from his own “lynching”, but he should not be permitted to flout the criminal law with impunity.

  8. I don’t understand the update. Are you saying that the PDF file linked to the update is wrong? The whole thing is wrong and there was no such account? Something else is wrong? What?

    1. It seems pretty straight forward–Mark states that his query in the original post is likely wrongheaded because Romney did disclose his UBS holdings in 2007, well before the 2009 tax disclosure. However, I disagree with Mark’s interpretation of the document. The 2007 document is not a tax form. The question is not whether Romney was hiding the account–it’s whether he was hiding the proceeds from that account. There is a further question as to how that account was accumulated. If it was merely money that the family decided to move for safekeeping, it’s one thing. But if it was a catchall for profits on foreign transactions, then it’s most certainly a tax dodge. Disclosing the existence of the account and even paying taxes on interest (which is fairly paltry in Swiss banks) is nothing next to the possibility that taxes are being evaded on the *principal*.

    1. Hmmm…it’s also unlikely that Mitt would have $3M in one US money market account. Banks like UBS (read: private banks / high-net worth operations / Investment Banks) usually only hold cash up until the FDIC limit.

      Any excess is then outsourced to another bank, so as to protect the customer in case the bank fails. Its one of those bells and whistles of Private banking.

  9. Why would it be a “scandal” if somebody who lost money rather than made it paid no taxes?

    1. It’s a “scandal” if your basic philosophy is that we should pay income tax based on how rich we are, rather than how much money we make.

      Brett, I’m at least as far to the left in my political leanings as you are to the right, but I’ll be darned if I felt I should pay income tax when my income was negative, and I was living on my savings.

      1. Read The Stakeholder Society for a good analysis of why wealth instead of income is a primary driver of inequality. I think it’s scandalous that a gazillionaire would get the free benefit of government services paid for by waitresses when his stock gambles don’t work out, and then pay an even lower rate than waitresses when they do.

    2. Wait, does this mean the “lucky duckies” meme on the right is No Longer Operative?

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