Kansas Governor Sebelius Corrects Tax Returns for 3 Years

By: AP
By: AP

WASHINGTON (AP) _ Health and Human Services nominee Kathleen
Sebelius has corrected three years worth of tax returns after
finding ``unintentional errors.''

Sebelius alerted senators to the changes in a letter dated Tuesday that was obtained by The Associated Press. She says the changes involved charitable contributions, the sale of a home and business expenses.

She and her husband paid a total of $7,040 in back taxes and $878 in interest from 2005-2007.

The questions surfaced as Sebelius sat Tuesday for a confirmation hearing with the Senate Health Committee. In questioning by Senators, Sebelius was talking tough when it comes to medical fraud.

Sebelius says she'd be a tough enforcer as she called for a crackdown on fraud as part of any health care overhaul.

During a Senate confirmation hearing, Sebelius said ``having a few strike operations may be the most effective way to send the signal that there's a new sheriff in town.''

Fraud is estimated to siphon off about 10 percent of what taxpayers spend for health care programs such as Medicare and Medicaid.

Sebelius also said she's concerned that efforts to control health care costs may ultimately prompt attempts to ration care, which she would oppose.

The 2 1/2-hour hearing was mostly low key. Sebelius has faced opposition from conservatives over her support for abortion rights,
but senators didn't raise that issue today.

The Senate Finance Committee will decide whether to send Sebelius' nomination to the full Senate. It will hold a hearing Thursday.

Sebelius' issues are the latest tax issue to hit an Obama administration nominee. His first HHS nominee withdrew because of major tax problems.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

Text of letter from Health and Human Services nominee Kathleen
Sebelius to Senate Finance Committee leaders on amendments to tax
returns, payment of additional tax plus interest:

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 acknowledgment 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 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


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