Where Are Romney’s Tax Returns? Ctd

Andrew Sullivan —  Jul 17 2012 @ 11:27am

The latest from a flailing campaign:

On Fox and Friends Monday, Romney said Heinz Kerry "has hundreds of millions of dollars, [but] she never released her tax returns" adding, "Somehow, that wasn’t an issue." But Heinz Kerry, the heiress to the Heinz fortune, did release a portion of her 2003 tax returns in October 2004, after an initial estimate in May of the same year. Romney adviser Ed Gillespie tried a similar tact on Sunday, claiming John Kerry hadn’t released his tax returns—a claim that had been debunked months ago.

And how did the GOP react in 2004?

Heinz Kerry’s net worth was estimated at more than $500 million at the time of the election, and for months Republicans pushed aggressively for her to release tax documents, arguing they were critical brush strokes in a portrait of the Kerrys’ collective wealth.

A reader says he "loves this comment" from a TPM write-up: "Is [Mitt] running for First Lady?" Another writes:

I haven't seen much about this in the press, but isn't the number of tax returns Romney releases much less important than which years he releases?

Mitt knows how to calculate profits. And Romney's 2010 and 2011 returns reflect years in which he's actively running for president – a time when he knows his finances will be scrutinized, and when public perception holds much greater long-term value for Mitt than trying to collect every last penny. So one has to believe he's not going to tell his accountants in 2011 to push the envelope on every questionable, quasi-unamerican accounting trick in the book. But what about before? If the 2010 and 2011 returns are sanitized versions of Mittenomics (and even they're filled with chicanery), I shudder to think about returns from his (as Kessler puts it) "gray period."

Which brings us to this post by a prominent law tax professor:

1) We know from the 2010 tax return, in which he had a net capital loss carryforward from 2009, that he zeroed out his net capital gains – including from carried interest Bain income – in 2009.

2) 2009 was the last year in which he received certain Bain payments as the playout of his "retroactive retirement."

3) It's been hard to understand what benefit he thought he was getting from the Swiss bank account, and there was an IRS amnesty program in 2009 for fraudulent nondisclosure of offshore income.

If he had to come clean in 2009, this might be embarrassing, especially given that there was an iron fist inside the IRS leniency offer (i.e., if you held out, they might get you without any amnesty). From the first two items above, it may be a reasonable guess that Romney had a lot more gross income in 2009 than 2010 and 2011, yet paid less tax or even zero tax. This might have had to involve, not just zeroing out capital gains via "loss harvesting" in response to the down 2009 stock market. but also creating tax shelter losses to offset ordinary income.

Another reader:

I'm very much looking forward to a reporter asking Romney this single question: "How many years worth of tax returns did you require VP candidates to submit for your consideration?"

Good one.