Sebelius' tax issue

As Jeffrey Young reports, HHS nominee Kathleen Sebelius has filed amended tax returns to account for $8000 in unpaid taxes for the last few years. The errors resulted from a number of mistaken deductions, including the interest on her home loan, business expenses and charitable contributions. Here is the letter Sebelius sent to Sens. Max Baucus (D-MT) and Chuck Grassley (R-IA), Chairman and Ranking Member of the Senate Finance Committee:
Dear Mr. Chairman and Senator Grassley:

In preparation for my confirmation process as the nominee for Secretary of the Department of Health and Human Services, my husband and I hired a Certified Public Accountant to conduct a thorough review of our tax returns for 2005, 2006 and 2007. That evaluation revealed unintentional errors, which we immediately corrected by filing amended returns.

Charitable contributions: For charitable contributions in excess of $250, taxpayers must have an acknowledgment letter from the charitable organization in order to take a tax deduction. Out of 49 charitable contributions we made in these three years, there were three for which we could not locate our acknowledgement letter. The amended returns eliminated these deductions.

Interest: In July of 2006, my husband and I sold our home for an amount less than the outstanding balance on our mortgage. We continued paying off the loan, including interest we mistakenly believed continued to be deductible mortgage interest. Another loan for home improvements was treated similarly. These errors were corrected in our amended returns.

Business expenses: In reviewing our taxes, we discovered we had insufficient documentation required to claim some of our reimbursable tax deductions for business expenses. While the amended returns reflect these changes, they did not affect the amount of taxes owed because we were subject to the Alternative Minimum Tax.

As a result of these amendments to our 2005, 2006 and 2007 returns, we paid a total of $7,040 in additional tax and $878 in interest. If you have any further questions, please do not hesitate to contact me.

Thank you for your consideration.

Sincerely,

Kathleen G. Sebelius

And here is the response from the two senators:
Dear Governor Sebelius:

Your 2005, 2006 and 2007 Federal income taxes have been reviewed in connection with your nomination to be the Secretary of Health and Human Services. We understand that you and your husband hired a Certified Public Accountant to conduct a thorough review of your tax returns in preparation for your nomination, and that amended returns were filed for each year. Your original returns and your amended returns were included as part of our review.

No additional items were identified that needed to be addressed as a result of our review. We would appreciate a response to this letter giving an account of the changes that were made in your amended returns.

We appreciate your full cooperation with our review and your timely response to this letter.

Sincerely,

Max Baucus Charles E. Grassley

Chairman Ranking Member