Trade Nominee Has Tax Issue But Might Catch a Break

Three's a trend. Five means that the tax system needs overhauled. Jon Kyl calls Ron Kirk's tax underpayment inadvertent.

CQP: The Senate Finance Committee reported Monday that President Obama’s nominee for U.S. Trade Representative — former Dallas Mayor Ron Kirk — underpaid his taxes by a total of $9,975 for 2005, 2006 and 2007, making Kirk the fifth Obama nominee to face tax-related problems during the confirmation process.

It was not immediately clear whether the development would threaten Kirk’s nomination, with one top Senate Republicans saying the tax oversights appeared “inadvertent.”

“Mayor Kirk has agreed to promptly file amended returns reflecting the adjustments discussed in this memo,” the Finance Committee said in its report. Kirk has agreed to file his amended return this week.

Obama announced that Kirk would be his choice as chief trade negotiator in December, but the committee has not yet acted on his nomination. Chairman Max Baucus , D-Mont., said last week that he was unaware of any problems with Kirk’s nomination.

The committee announced Monday that it would postpone Kirk’s confirmation hearing from March 5 to March 9, but a committee aide said the reason for the delay is a scheduling conflict with a planned White House health care summit.

“Mayor Kirk is the right person for this job and I will work to move his nomination quickly,” Baucus said Monday. “I am confident he can successfully restore the confidence of Congress and the American people in a balanced international trade agenda. I look forward to his testimony before the Finance Committee next week.”

Minority Whip Jon Kyl , R-Ariz., said it was too early for him to judge any peril to the nomination or gauge how his colleagues would react.

“In his case, it looked like it was inadvertent,” Kyl said.

What happened?

According to a committee report, in 2004, 2005, 2006 and 2007, Kirk asked that honoraria received for speeches he gave be assigned to his alma mater, Austin College. As a result, he and his paid tax preparer did not think that the money, which totaled $37,750, counted as taxable income. In 2005, however, Kirk deducted four honoraria totaling $7,500, as charitable donations.

Obama Picks Ron Kirk For Trade Rep

Attorney Ron Kirk was the first black mayor of Dallas. His favorite quote: “If you find yourself in a hole, stop digging.” He likes the color blue.

USA Today: A Democratic official says President-elect Barack Obama intends to name Ron Kirk as the United States' trade representative.
Kirk is a former mayor of Dallas, and was the first black to hold that post.

The official spoke on the condition of anonymity because Obama has not made the selection public. He's expected to make the announcement in coming days.

Kirk's challenges:

Reuters: Obama is expected to make the announcement on Friday in Chicago, the source said.

Kirk, a partner at the Houston-based law firm of Vinson and Elkins, has acknowledged having talks with Obama's transition team about a job in the new administration.

Obama turned to Kirk, who is little known in Washington trade circles, after his first choice Rep. Xavier Becerra, a California Democrat and member of the House of Representatives Ways and Means Committee, turned down the job.

"My concern is how much weight this position would have had, and I reached the conclusion that it would not be a top priority or even a second or third priority," Becerra told La Opinion, a Los Angeles Spanish-language newspaper, in an interview earlier this week.

Becerra's comment increased already strong U.S. business concerns that long-time trade priorities like finishing the Doha round of world trade talks would be put on the back burner while Obama and Congress focus on restoring U.S. economic health and other domestic concerns.

Obama has already indicated that winning approval of two pending free trade agreements with Colombia and South Korea will not be top agenda items.

Instead, one of Kirk's first challenges, if approved by the Senate, would be to make good on Obama's promise to add stronger labor and environmental provisions to the North American Free Trade Agreement, a pact often blamed by labor groups for moving U.S. jobs to Mexico.