(cross-posted with permission from my post on DailyKos)
There are few things worse for a politician than an unpaid tax lien, especially in a state like California where our perennial budget crisis makes it even more important for our politicians to demonstrate their commitment to paying their fair share.
Enter Lieutenant Governor Abel Maldonado, who was appointed by Governor Schwarzenegger to the position after John Garamendi won the special election created by the appointment of Ellen Tauscher to the position of Undersecretary for Arms Control.
According to the Los Angeles Times, Abel Maldonado has had a substantial tax lien placed on his family farm:
The single-page IRS lien indicates that Maldonado owes the government $111,146 for underpaying a category of taxes that include Social Security, Medicare and federal withholding contributions for employees on his 6,000-acre farm in Santa Barbara County.
An IRS spokesman declined to comment on the ongoing case.
Maldonado’s people claim that this lien actually arises from a dispute about whether certain vehicles are for public or private use. But as someone who has administrated tax payments for small businesses, this seems like a strange defense: the category of taxes that the IRS is claiming that Maldonado owes are “form 941” taxes, which withhold income taxes, social security taxes and Medicare taxes from employee paychecks. It is possible for this form 941 withholding lien to be the result of a dispute over whether a vehicle is for personal or business use, as the IRS explains in its employer’s guide:
You may choose not to withhold income tax on the value of an employee’s personal use of a vehicle you provide. You must, however, withhold social security and Medicare taxes on the use of the vehicle. See Publication 15-B for more information on this election.
So this is apparently what this dispute is about. But even if we grant Maldonado the benefit of the doubt here, there’s a much larger problem: the tax lien is over $111,000. Do you realize how much the IRS would have to have been estimating the value of the “company vehicle use” he had been engaging in to rack up a tax bill that high? Simple mathematics based on the applicable tax rates would indicate that the total valuation of the “vehicle use” would have to have been in the high six figures, which is unconscionable in and of itself.
Bottom line is, Maldonado has some explaining to do. And it’s not even the first time:
It is the ninth time since 1992 that federal, state or local tax collectors have resorted to liens against the Santa Maria Republican’s family farm in an effort to compel payments totaling more than $240,000, public records show.
For Lieutenant Governor, California has a much better choice in San Francisco mayor and marriage equality hero Gavin Newsom.