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George Miller asks how Romney’s IRA got so fat

By Josh Richman
Friday, August 3rd, 2012 at 4:33 pm in 2012 presidential election, George Miller, Mitt Romney, U.S. House.

Mitt Romney’s financial disclosure showed he has an Individual Retirement Account worth somewhere between $20 million and $101 million – but the annual contribution limits for IRAs during most of Romney’s time at Bain Capital ranged from $2,000 to $30,000.

It would take about 666 years – no biblical meaning intended – for a $30,000 annual contribution to add up to $20 million, although IRA funds can be invested in certain ways.

And so Rep. George Miller, D-Martinez, the Education and the Workforce Committee’s ranking Democrat; Rep. Sandy Levin, D-Mich., the Ways and Means Committee’s ranking Democrat; and Rep. Chris Van Hollen, D-Md., the Budget Committee’s ranking Democrat, wrote a letter yesterday to the Treasury and Labor departments asking how this can be.

“The purpose for tax-preferred retirement accounts and plans are to encourage Americans to save for retirement,” they wrote. “The accounts and plans are clearly not intended to serve as tax shelters for wealthy individuals to shield vast sums of money. As you can imagine, given the sacrifices that middle-class families have made in recent years, we are alarmed to learn that wealthy taxpayers may be taking advantage of a tax subsidy that is designed to provide for retirement to instead accumulate massive amounts of tax-sheltered assets.”

Miller yesterday cited recent news reports indicating that Bain Capital allowed service partners and employees to co-invest in investment deals via tax-preferred retirement accounts and plans, providing in some cases a fourth of the total capital in the investment deals. It’s possible the investments made through these accounts and plans may have been assigned a nominal value that was significantly lower than the fair market value of the investments, creating an end-run around the annual contribution limits.

Follow us after the jump for the specific questions the lawmakers posed to the federal officials…

What are the current standards related to the valuation of assets that are purchased by tax-preferred retirement accounts and plans? Is fair market value the standard, or are other valuations permissible? Is a liquidation valuation permissible?

What proof are taxpayers required to submit if they are examined with respect to the value of assets held by tax-preferred accounts and plans when such assets are not publicly traded or the value cannot be established by reference to an established market?

How many audits has the Internal Revenue Service conducted over the last 3 years regarding the valuation of assets held by tax-preferred retirement accounts and plans? Has the DOL engaged in any examination activity in this area, and if so, pursuant to what rules under ERISA?

Does Treasury have an estimate of the “tax gap” that is attributable to low valuations of assets held by tax-preferred retirement accounts and plans?

What safeguards are in place to avoid the mis-valuation of assets held in tax- preferred retirement accounts and plans when those assets are not publicly traded or valuation cannot be established by reference to an established market?

What are your policy recommendations for addressing this issue?

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  • Elwood

    ” It’s possible the investments made through these accounts and plans may have been assigned a nominal value”

    The operative words here are “possible” and “may”.

    It’s quite possible that George Miller (Nancy Pelosi’s imp)may be engaging in a witch hunt three months before the election.

    There is no depth to which George and Nancy will not sink.

    It’s also possible that I may have flown to Pluto last week.

  • JohnW

    If they made IRA’s an Olympic sport, Mitt would be an unchallenged Gold medalist.

  • moderate voter

    Romney’s been a little slow to release those tax returns, and now we know why. Romney, in my view, is a smiling Gordon Gecko from the movie “Wall Street”. His company Bain Capital – which he is trying to pretend he hasn’t worked for in years – buys companies, lays everybody off, eliminates health care, pensions and profit sharing for workers, then re-staffs with part time minimum wage workers. These part time workers make so little money they qualify for food stamps and when they get sick they hit county health clinics, at taxpayers expense. Meanwhile, the stock prices of these worker-less companies then go through the roof and Romney and his henchman pocket 20 million a piece. Yes,Romney is Gordon Gecko come to life. And he doesn’t pay his fair share of taxes to boot, as Congressman Miller is reminding us!
    If you are concerned with growing the middle class as I am – and Congressman Miller is – I think you’ve got to stick with O’Bama. Romney will be a middle class job killer – just look at what he did at Bain Capital.

  • RR, Senile Columnist

    Them richie rich boys got all them angles figured out. I’m gonna get me a gig a Bain and watch them dollars pile up. They’ll have to pay me in gold bars or casks full o cash. Ya baby!

  • Elwood

    @ #3 moderate voter

    Both you and Georgie Porgie can spin a really good yarn.

    Sheer conjecture of course, but who cares about a little thing like reality?

  • JohnW

    As Leona Helmsley once said, “only the little people pay taxes.”

  • RR, Senile Columnist

    Re #6: Great quote. And for all fans of Spare the Air days, “Only Losers Take the Bus” by Fatima Mansion

  • Common Tater

    Tax avoidance: legal.

    Tax evasion: bad karma and illegal.

    What’s the problem?

  • DON

    Miller was involved in voting for the IRA rules.

  • JohnW

    Tax avoidance: legal. What’s the problem?

    To paraphrase the Leona Helmsley quote, “only the big people get to do tax avoidance.” The exotic loopholes and shelters that enable the avoidance are “of, by and for” the Mitt Romneys of the world. Some are perfectly legal, having been created at the behest of those who use them. Some are in the “gray area.”

    In Leona’s case, sticking with the legal and gray area loopholes wasn’t good enough. She got greedy, crossed the line and went to the big house but was still rich once released.

    The only area where there is reason to believe that Mitt may have actually broken a law has to do with the SwissUBS bank account. If he took advantage of the 2010 IRS amnesty program, that would mean he had previously made illegal use of a secret account to avoid taxes.

  • Elwood

    @ John W. #10

    “If he took advantage of the 2010 IRS amnesty program, that would mean he had previously made illegal use of a secret account to avoid taxes.”

    I guess his 2010 tax return would show that, wouldn’t it?

    Nice use of “if” but you forgot “may” and “possibly”. And then there’s Harry Reid who almost comes right out and admits that he’s making **** up.

  • Elwood

    “only the big people get to do tax avoidance.”

    Au contraire, I’ve used tax avoidance for years, as have millions of others.

    Neither they nor I would fit Queen Helmsley’s definition of “big people”.

  • JohnW

    “I guess his 2010 tax return would show that, wouldn’t it?”

    Except that, when he released his 2010 tax return, the only one released to date, he did not publicly release the FABR form required by the IRS that gives details of the account. Romney has acknowledged that they had $3 million in the Swiss account, for “diversification.” They say it was a money market account that earned only $1,700 interest. My guess is that, you, Elwood, could get better than $1,700 on your $3 million account, and that you wouldn’t pay the fees required to set up a Swiss account so that you could get less interest than the credit union down the street would pay. They closed the account in 2010. I sure hope they were able to find a better deal on their money right here in American the Beautiful (Mitt’s favorite song).

  • JohnW

    Re: #12

    Yeah, Elwood, I also do tax avoidance — like mortgage interest, property taxes, medical expenses etc. And, if I had business income, I would deduct legitimate business expenses.

    But, unless you’re in Mitt’s league, I doubt you shuffle millions around a labyrinth of trusts, set up your wife’s hobby as a corporation, pay a top 15% rate on commission income that you get to call “carried interest” by funneling it through a partnership, put a business partnership interest into an IRA account at an understated value to qualify it within the IRA contribution limit…

    Don’t get me wrong. If it’s legal, I would do it to. The question is, why is it legal?

  • RR senile columnist

    Rich or poor, it’s nice to have money

  • BGR

    Like Miller isn’t sitting on a pile of ill gotten gain. He who casts the first stone should produce his own financial records first.

    All of them

  • JohnW

    I agree with #16 BGR.

    When George Miller runs for president, he should release his tax returns.

    Members of Congress don’t release tax returns, but they are required to file financial disclosures every year.

  • RR, Senile Columnist

    Ok, enough is enough. I wanna see everybody’s tax returns, now! Let’s start with the balance sheet of the Contra Costa Times.

  • Elwood

    “Members of Congress don’t release tax returns”

    I don’t think they’re prohibited from doing so. They choose not to. And in many cases probably for good reason.

  • JohnW

    You can make a strong argument that nobody should be required or expected to release tax returns. That doesn’t include closed door vetting of people being considered for sensitive appointments with the judiciary, FBI, CIA, SEC, the Fed, IRS etc. Maybe all future candidates should just say, “none of your business.” Mitt’s not in a good position to be the one to start that trend.

    The problem for Mitt is that all the other kids running for president in the past quarter century have released multiple years of returns. McCain only released two years, which is still more than Mitt has. But McCain has been on the national stage for 40 years. A guy with his familiar history and reputation tends to get a pass. A guy coming from Mitt’s line of work doesn’t.

    Mitt can stick to his guns. But people then have a right to draw their own conclusions as to what he doesn’t want them to see and whether that is relevant to his fitness to be president.

  • Elwood

    I’m sure Mitt’s wealth makes his returns more complicated than those of a brokeass community organizer who never had a private sector job in his life, let alone met a payroll or made any money.

    See also: Tony Rezko

  • JohnW

    Well, getting back to the original post, Miller’s questions about rules for valuation of non-cash assets placed into IRA accounts seem pretty common-sense to me.

  • Publius

    Word on the street is that Miller hasn’t paid taxes for over 10 years.

  • JohnW

    Re #23

    Then, I reckon I won’t vote for him for president either.

  • BGR

    George must have heard it from Harry Reid’s imaginary friend…so it must be true!

    Kill ’em with unprovable and disprovable insinuation. Miller is soooo classy.

  • Elwood

    Harry Reid all but admits that he’s lying, and then Miller’s boss Pelosi says well, it may be a lie, but if Harry says it, that’s good enough for her.

  • JohnW

    It’s hard to imagine former Senate majority leaders like Howard Baker, George Mitchell or Mike Mansfield doing what Reid did on the Senate floor. Not so hard to imagine Mitch McConnell doing it if the shoe were on the other foot. But, whatever Reid has done, it’s not “McCarthyism,” as even people like Jon Stewart have suggested.

    Modern-day McCarthyism is engaging in a smear that puts the victim in the predicament of having to prove a negative that is nearly impossible to prove to everybody’s satisfaction once the rumor is out. Examples: Bush operatives accusing McCain of fathering an illegitimate black baby during the 2000 South Carolina primary; the Swiftboating of John Kerry; the Birthers; GOP House members saying the government is being infiltrated by the Muslim Brotherhood and specifically accusing one of Hillary Clinton’s top aides of ties to the Brotherhood.

    Romney is no such victim. He can easily disprove Reid’s claims and, in the process, totally demolish Reid’s credibility and reputation. He doesn’t have to jump through hoops to do it. All he has to do is do what other presidential candidates have done.

    I find it hard to believe Romney paid no taxes for ten years, or even one year. But I feel free to draw my own conclusion that there must be something beyond what we already know from Romney’s 2010 return that makes him choose to take the political hits rather than just release a few years of taxes.

  • Elwood

    Proof that Nancy Pelosi is insane:

    “Pelosi ‘Swears’ Spirit of Susan B. Anthony Spoke to Her in White House”

    And yes, I know it’s from the evil CNS News!

  • JohnW

    Know what she means. I was speaking with Abe Lincoln just yesterday.

  • Devid.L

    You´re totally correct @ John W, his 2010 tax return would definitely show and this would be interesting to know more about but yes, he didn´t release the FABR for that was required by the IRS that gives his details.