Mitt Romney's Tax Returns
Round One: Dec. 2011-Jan. 2012

The issue of whether and then when former Gov. Mitt Romney would release his tax records started simmering in late 2011.  In a December 21 interview with Chuck Todd on MSNBC's "The Daily Rundown," Romney stated, “I don’t intend to release the tax returns.  I don’t.”  However, the issue came to the fore during the South Carolina primary campaign.  Romney's record at Bain drew close scrutiny, epitomized by Gov. Perry's "vulture capitalism" label and the half-hour attack video that the pro-Gingrich super PAC Winning Our Future ran.  In this environment, the question of Romney's tax records reverberated.  When would he release them?  How many years of returns would he release?  Romney's and his campaign's responses were muddled.  During the January 16 FOX News he state he would "probably" release his records in April.  (To draw a contrast, Newt Gingrich released his 2010 income tax returns on January 19).  The tax returns issue, or the Romney camp's handling of it, likely contributed to the size of Romney's defeat in the primary.  Needless to say, Democrats and their allies had a field day with the subject; the DNC sent out dozens of communications on the matter.  The Romney campaign saw it had to act, and on January 24 he released returns for 2010 along with 2011 estimates.  [The campaign held a press conference call to discuss the release of the Romney's tax returns.  Scheduled to participate were Brad Malt, Ropes and Gray (Trustee), Fred T. Goldberg, former Internal Revenue Commissioner, Ben Ginsberg, Patton Boggs (National Counsel), Lanhee Chen, Romney for President Policy Director, and Gail Gitcho, Romney for President Communications Director].  Below are examples of communications on the tax records issue.

See also:
Editorial Board.  "Why won't Romney release his tax returns?" Washington Post.  Jan. 11, 2012
. >
Editorial Board.  "Mitt Romney's secret money." Washington Post, Dec. 25, 2011. >

Excerpts from the January 16 FOX News Debate in Myrtle Beach
Gov. Perry: "...And Mitt, we need for you to release your income tax so the people of this country can see how you made your money.  And -- and I think that's a -- I think that's a fair thing. Listen, here's the real issue for us, as -- as -- as Republicans, we cannot fire our nominee in September. We need to know now. So I hope you'll put your tax records out there this week so the people of South Carolina can take a look and decide if, you know, we've got a flawed candidate or not."

Kelly Evans: Governor Romney, Speaker Gingrich, Senator Santorum and now vocally tonight Senator Perry -- Governor Perry -- are calling for you to release your tax records. The Obama campaign is asking for the same thing. Governor, will you release your income tax records?

Former Gov. Romney: You know, I looked at what has been done in campaigns in the past with Senator McCain and President George W. Bush and others. They have tended to release tax records in April or tax season. I hadn't planned on releasing tax records because the law requires us to release all of our assets, all the things we own. That I have already released. It's a pretty full disclosure. But, you know, if that's been the tradition and I'm not opposed to doing that, time will tell. But I anticipate that most likely I am going to get asked to do that around the April time period and I'll keep that open.

Evans: Governor, you will plan then to release your income tax records around April?

Former Gov. Romney: I think I've heard enough from folks saying, look, let's see your tax records. I have nothing in them that suggests there's any problem and I'm happy to do so. I sort of feel like we are showing a lot of exposure at this point. And if I become our nominee, and what's happened in history is people have released them in about April of the coming year and that's probably what I would do.

RELEASE from the Democratic National Committee (Melanie Roussell)
January 17, 2012


The Democratic National Committee today released a new web video and launched a Twitter campaign based on Mitt Romney’s continued dodging, when asked questions about his record and his finances.  The video, titled “Still Dodging” follows on the theme of a DNC video released this morning, and points out Romney’s newest dodges.

In one of his latest dodges, Mitt Romney indicated that he MAY release some part of his 2011 tax returns and that his tax rate is closer to 15 percent because his income over the last ten years has come “overwhelmingly from some investments” made in his past.

Why not just put everything out in the open and release his full tax returns for the past 10 years?

George W. Bush released his taxes back to ’91, Obama released eight years of returns - to ’00, even Mitt’s father released 12 years of tax returns - what is Mitt hiding? 

The DNC is taking to Twitter to find out.  We are asking Twitter followers to tweet ideas at #WhatsMittHiding – we look forward to hearing what voters have to say about Mitt’s dodges and what he might be hiding.

MEMO from American Bridge PAC
January 23, 2012

MEMO: Romney's Taxes - What We'll Be Looking For

With the impending release of Mitt Romney’s taxes, we thought it might be helpful to highlight a few of the items we will be looking for in his 1040. It is important to note that no matter what his taxes reveal, it will be an incomplete picture of his finances, which could be clarified by examining his taxes back to his Bain days.

Form 1040

Home Address
– In which state did Romney declare residency?

Line 7 Earnings
– Did Romney earn any wages, or did all of his income come from other sources?
– Did Romney receive K-1 earnings form a partnership in a corporation?

Line 8a Taxable Interest
– How much interest did Romney earn?

Line 8b Tax Exempt Interest
To calculate the percentage of taxes Romney paid, this line must be added to his total income, because it only appears on this line (because it is tax exempt).Although it is not taxable, this is still income.

Line 12 Business Income
– Did Romney claim any business income?
If he owned any businesses it could appear here. His speaking fees could also likely appear here.

Line 13 Capital Gains
– How much income did Romney receive that is taxed at a lower capital gains rate?

Line 21: Other Income
This is where some unknown unknowns should show up. If there is a number here, there will be additional paperwork.

Line 22: Total income
Again, to calculate Romney’s real income, add line 22 + line 8b tax exempt interest.

Line 28:
If a business Romney owned made retirement contributions, it could appear here.

Line 40: Itemized Deduction Total
Romney’s deductions, including charitable giving will be outlined on Schedule A and totaled here.

Line 45: AMT
– Does Romney pay the AMT?

Schedule A: Itemized Deductions
– How much did Romney donate in the form of stock?
This form outlines Romney’s itemized deductions. Things like charitable contributions can be expected here. We could list any number of things for the press to watch out for, for example donations that contradict his values. Important note: Donating stock is a very tax efficient way to make a contribution. If someone owns a stock, and it earns money, they can donate it (and receive a tax deduction) without having to pay capital gains taxes. Unfortunately, Schedule A does not require an indication of a stock contribution, and it will only appear as a financial figure.

Schedule B: Interest and Ordinary Dividends:
– What interest and dividends did Romney earn?
– Did Romney pay U.S. taxes on interest and dividends held in other nations?
This form requires the disclosure of all accounts where interest or dividends were paid. If accounts were held in other countries, then Romney was required by law to also file form TD F 90-22. Form TD F 90-22 is a separate filing and is not filed with a 1040. Did Romney make it public?

Schedule C: Business Profit and Losses
– Did Romney declare a profit or loss from a solely owned business?
It’s possible Romney’s speaking fees appear here.
– How much did Romney spend on travel and hotels during his speaking trips?
These would appear as expenses that contributed towards his business earnings.

Schedule D: Capital Gains
– What did he earn capital gains from?
This should be a very extensive section for Romney and will be relatively self-explanatory.

Schedule E:  Supplemental Income and Loss

Part I: Profits Or Losses From Rental Properties Or Royalties
Romney could have royalty income from any number of investments. It should also be noted that royalties from his book are likely reported under income or self-employment.

Part II: Profit Or Loss From Partnerships And Corporations.
– Is Romney still a member of Bain Capital?
Here is where Romney must declare interests in partnerships and corporations.

Form 1065 Schedule K1
This is where carried interest is listed, but he may not file them with his taxes. However, if he is claiming carried interest, he would need to list himself as a member of Bain capital on Schedule E.

MEMO from the Democratic National Committee
January 24, 2012
From:    Brad Woodhouse, Democratic National Committee
To:        Interested Parties
Date:     January 24, 2012
RE:        Mitt Romney’s Tax Returns Release Raises More Questions than it Answers
After flip-flopping several times on whether he would make public his tax returns, Mitt Romney is set this morning to release to reporters his 2010 tax returns and an estimate of his 2011 taxes.  This planned release follows weeks of sustained criticism of Romney’s stonewalling on his taxes by the media, other candidates for the Republican presidential nomination, and even top Romney supporters like Chris Christie.
Despite Romney’s capitulation today, his decision to release just two years of returns falls far short of the eight years President Obama released, the almost decade released by President Bush and the 12 years of tax returns that his father, George Romney, released during his run for president.  It will do little to put to rest the serious questions that have plagued him about how he made his $200+ million fortune. Even as Romney has made his private-sector experience the central premise of his campaign, he continues to duck key questions about his time at Bain Capital; this partial release of just two years of tax returns will provide little insight into his time there.   As Mitt Romney's father said as he handed over 12 years worth of returns, "One year could be a fluke, perhaps done for show."   What's worse is that we know he has 23 years of returns ready, having handed them over to Senator McCain when he was vying for the Vice President spot on the 2008 Presidential ticket.   If those 23 years are good enough to show John McCain, why isn't Mitt Romney comfortable showing the American people?  
Already, Romney’s limited release has drawn criticism. NBC’s Chuck Todd emphasized that Romney’s tax return issue “isn’t fully going away” and that his disclosure falls short of the “President Bush standard” of releasing 10 years of prior returns.
In advance of the Romney campaign’s call today, we wanted to provide you with some key questions that it must answer both about the tax returns it’s about to release and the many more it will keep secret.
Key Questions for Mitt Romney on his Tax Returns:
What is Mitt Romney’s effective tax rate? Is he calculating his tax rate based on his taxable income rather than the correct measure based on adjusted gross income?
How much did Romney make in earned income versus investment income?
How much would Romney personally benefit from his own tax policies?
Romney owns residences in Massachusetts, New Hampshire, and California. What state does he claim as his primary residence and where does he pay income taxes?
Does Romney use strategies involving charitable deductions that are unavailable to middle income families?
How much does he avoid paying in taxes due to offshore holdings in the Cayman Islands and other locations?  Will he release materials that describe his offshore investments?
Key Questions his 2010/2011 tax returns will not answer:
How much did Romney make, and what tax rate did he pay, from 1984 to 2009, a period when he served as a corporate buyout specialist at Bain Capital and continued to receive a share of the profits  from them as part of his non-compete agreement? 
How much did Romney make off of specific Bain Capital deals, like the dividends Bain Capital took out that drove KB Toys and Dade Behring into bankruptcy while thousands of workers were laid off?
From mid 2007-2009, Romney did not release any personal financial disclosures or any information about his income sources. Will he reveal how much money he made during this time period and how he made it?
In 2007, Romney said that he would immediately divest himself from holdings in Iran and stem cell research. But we know that he continued to buy and sell these holdings in his charitable trust. Only his 2007 tax returns would provide proof of immediate divestment- will he release them to prove that he kept his word?
How much income does not even show up on Romney’s tax forms in the form of unrealized gains, offsetting capital losses, and use of corporations to shield income?
PRESS RELEASE from Romney for President
January 24, 2012


Boston, MA – Former Commissioner of the Internal Revenue Service Fred Goldberg released the following statement on Mitt Romney’s tax returns:

“I have reviewed Governor and Mrs. Romney’s joint tax return for 2010, including returns for the Ann and Mitt Romney Family Trust, the Ann D. Romney Blind Trust, and the W. Mitt Romney Blind Trust. I have also reviewed the return in process for 2011. These returns reflect the complexity of our tax laws and the types of investment activity that I would anticipate for persons in their circumstances. There is no indication or suggestion of any tax-motivated or aggressive tax planning activities. In my judgment, they have fully satisfied their responsibilities as taxpayers. They have done so by relying on a highly reputable return preparer and other advisors, who have in turn relied primarily on information provided by third parties to them and to the IRS. The end result of that process has been returns that include a multitude of schedules, IRS forms and accompanying statements that provide appropriate transparency and the proper payment of taxes that Governor and Mrs. Romney owe under current law.”

PRESS RELEASE from Romney for President
January 24, 2012

Boston, MA – Governor Chris Christie, Governor Tim Pawlenty, Congressman Connie Mack, and former Chairman of the National Council of Economic Advisers Glenn Hubbard made the following statements on Mitt Romney’s tax returns:
New Jersey Gov. Chris Christie
“I congratulate Mitt Romney on releasing such extensive tax returns. It is now time that we get back to the issues of fixing our economy and helping the middle class. Throughout this entire campaign, Mitt Romney has been focused on one thing: creating jobs for the American people. Democrats and some in our party can still try and distract from the most pressing issues facing our country, but Mitt Romney is going to spend every day working on issues that matter like growing the economy, cutting spending and taxes, and strengthening America’s place in the world.”
Former Minnesota Gov. Tim Pawlenty
“With the release of Mitt Romney’s tax returns, it is time to focus again on the real issues facing American families. Instead of focusing on distractions created by the Obama campaign and some in our party, we need to work to reverse the President’s failed policies and help the middle class. That is what Mitt Romney is focused on every day.”
Florida Congressman Connie Mack
“I’m happy that we can finally get back to the issues that matter. For too long, Democrats and even some in our party, have used this to hide from their own record. Now that this is out of the way, we can now get back to focusing on President Obama and his failure to create jobs.”
Former Chairman of the National Council of Economic Advisers Glenn Hubbard
“The current tax code is biased against saving and investment and risk-taking. It is for that reason that economists have urged and policymakers have legislated lower tax rates on dividends and capital gains – already taxed once at the corporate rate. Maintaining a low capital gains tax rate and low dividend tax rate also allows capital to be unlocked and allocated toward its most productive uses, while reducing the tax bite on savings for tens of millions of Americans for retirement and other purposes. Raising tax rates on dividends and capital gains hurts investment and growth, while increasing incentives for leverage.”
But Democrats and their allies showed no inclination to let these issues go away...

EMAIL from DNC, Brad Woodhouse
January 26, 2012

BREAKING: Romney Swiss Bank Account, Foreigh Funds, Not Disclosed on Financial Disclosure Reform as Required

In addition to the low rate of taxes Mitt Romney pays, and his opposition to the Buffet Rule, we now know a few more things that should be troubling about what we’ve learned from Mitt Romney’s one tax return released this week.

1.     A Swiss Bank Account existed and was closed because of fear it would be politically embarrassing

2.     No one in the Romney world, including Mitt Romney, can explain why he had a Swiss Bank Account in the first place

3.     Now we’ve learned that he did not disclose on his personal financial disclosure form – required by those running for federal office -  the Swiss Bank Account or other funds located in overseas tax havens.

And remember Mitt Romney for weeks used the fact he is required to file a personal financial disclosure as the excuse for why he should not have to also release his tax returns.  And Romney, being a numbers guy, certainly knew that his tax returns would show stuff like the Swiss Bank Account and that his PFD would not.


The LA Times appears to have found what it looks like he was trying to hide the whole time – foreign bank accounts and funds in notorious tax havens.  If anyone needed more evidence as to why Mitt Romney should release multiple years of his tax returns – this should do the trick.  Mitt Romney should at least release the twelve years of returns his dad did -  and given these revelations should immediately release those returns for every year he filed a financial disclosure so we can see what else he has been trying to hide from voters. 

Key Points:

Some investments listed in Mitt and Ann Romney’s 2010 tax returns – including a now-closed Swiss bank account and funds located in overseas tax havens – were not explicitly disclosed in the personal financial statement the GOP presidential hopeful filed last August. as part of his White House bid.

A review by the Los Angeles Times/Tribune Washington Bureau found that at least 23 funds and partnerships listed in the couple’s 2010 tax returns did not show up or were not listed in the same fashion on Romney’s most recent financial disclosure, including 11 based in low-tax foreign countries such as Bermuda, the Cayman Islands and Luxembourg.

Many of the undisclosed funds are affiliated with Bain Capital, the Boston-based private equity firm Romney ran for 15 years. Several others are apparently unrelated offshore entities with mysterious names such as Babson 2006-1, which is based in the Cayman Islands, and Barracuda Investments, which has an address in Dublin but appears to be solely owned by Golden Gate Capital, a private equity firm based in San Francisco.


Romney tax returns detail funds not identified in ethics forms

Los Angeles Times // Matea Gold and Tom Hamburger

Published: 12:41pm PST


Reporting from Washington -- —

MEMO from American Bridge 21st Century

To: Interested Parties

From: Rodell Mollineau, President American Bridge 21st Century

RE: Sunday Show Memo- 12 Things We Could Learn From Previous Romney Tax Returns

Date: January 27, 2012

Mitt Romney is in a very dangerous position. According to a Washington Post/ABC survey released on Tuesday, in the last two weeks Romney's favorability/unfavorability rating has completely inverted, and now stands at 31% favorable and 49% unfavorable. An NBC/WSJ poll released Thursday shows similar results with only 31% of voters saying they have a positive view of Romney. If Romney is able to get out of the primary, having such high unfavorabilities will be incredibly damaging with independent voters.
Several factors have played into Romney’s precipitous drops with the most recent focused on his taxes -- from his initial refusal to be open with the American people, to releasing only one year which showed overseas investments and a 13% tax rate, to the latest revelation that his release was riddled with errors and omissions.
These factors have only succeeded in raising more questions than answers. It cannot be stated enough: One year of taxes is simply unacceptable. It is too easy to scrub these returns, and one year does not paint an accurate picture for the voters of how Romney amassed his personal fortune.
Below are 12 questions that Mitt Romney needs to answer by releasing his previous years’ tax returns.
1: What was Romney’s tax rate in earlier years? Romney’s 2010 tax rate was 13.9%, but was it even lower in previous years?
Romney Paid A 13.9 Percent Tax Rate In 2010 On $21.7 Million In Income. According to Bloomberg, Romney “earned $21.6 million in 2010 and paid 13.9 percent of that amount in income taxes, using the preferential rate on investment income and charitable deductions to pay a smaller share of his earnings than top wage earners typically do. The former private-equity executive and Massachusetts governor earned more than half of his income from capital gains and dividends, which are taxed at a top rate of 15 percent, rather than the 35 percent top rate for ordinary income. […] Romney’s income puts him near the very top of U.S. taxpayers.” [BusinessWeek, Bloomberg, 01/24/12]
2: What other foreign bank accounts did Romney hold? As has been widely reported, Romney held accounts in Switzerland, Ireland, and the Grand Caymans. How many more are hidden in previous years' returns?
Romney Held Much More Funds in Foreign Accounts in Previous Years Than He Did in 2010 And 2011. According to Mitt Romney’s 2011 estimated taxes, he paid $67,173 in foreign taxes in 2010. However, he also discloses that in 2005, he paid $333,149 in foreign taxes; paid $276,386 in 2006; $275,288 in 2007; and $151,015 in 2008. [Romney 2011 Tax Estimate, page 81]
Additionally: Romney failed to disclose IRS form TD-F 90-22. Holders of foreign bank accounts are required to complete this form and submit it separate from their tax returns. Romney opted not to disclose the form.
Romney Listed A Swiss Bank Account On His 2010 Tax Return. According to the Boston Globe, “Advisers to Republican presidential candidate Mitt Romney are acknowledging that he once had a Swiss bank account but that it was closed in 2010 as prepared to enter the race for the White House. The Swiss account is listed on Romney’s newly released 2010 federal income tax return. It had been opened by a Boston lawyer who oversees the Romney family investments and a blind trust containing millions of dollars in assets.” [Boston Globe, 01/24/12]
3: In a surprising revelation, Romney’s tax returns indicated a continuing (and confusing) relationship with Bain Capital, even though Romney claims to have severed his relationship in February 1999. His previous tax returns could shed more light on this ongoing relationship.
The Ann D. Romney Blind Trust Listed A Partnership Interest In Bain Capital Partners (Am) X, Lp. Mitt Romney's tax returns included a transfer notice of a Bain Capital Partners (AM)X LP to the Ann Romney trust. The value of the property at election was listed as $0. According to the document “The interest in the future appreciation of the Partnership's business to which I am entitled pursuant to my partnership interest is subject to forfeiture if I cease performing services for the Partnership.” The document was signed by Romney trustee Bradford Malt. [Mitt Romney 2010 Tax Filing Pg. 131-132]
The Ann D. Romney Blind Trust Listed A Partnership Interest In Bain Capital Partners (Am) X, Llc. Mitt Romney's tax returns included a transfer notice of a Bain Capital Partners (AM)X LP to the Ann Romney trust. The value of the property at election was listed as $0. According to the document “The interest in the future appreciation of the Partnership's business to which I am entitled pursuant to my partnership interest is subject to forfeiture if I cease performing services for the Partnership”  The document was signed by Romney trustee Bradford Malt. [Mitt Romney 2010 Tax Filing Pg. 133-134]
4: Did Romney pay the Unrelated Business Income Tax (UBIT) tax on his multi-million dollar IRA? If not, do Romney’s earlier taxes shed light on using off-shore “blocker” corporations to avoid the UBIT Tax) on his multi-million dollar IRA?
Mitt Romney Obtained A Multi-Million Dollar Ira By Investing Retirement Funds In Bain Capital. According to Wall Street Journal, “Like many Americans, Mitt Romney has an individual retirement account. Unlike most Americans, Mr. Romney has between $20.7 million and $101.6 million in it, a big chunk of his fortune. Experts on estate planning said it is highly unusual to accumulate such a considerable sum in an IRA, an investment vehicle restricted by annual contribution limits. It appears that Mr. Romney’s grew so large mostly because it holds investments in Bain Capital, the private-equity firm he helped start.” [Wall Street Journal, 1/19/12]
Investments In Companies That Use Debt To Buy Companies Would Normally Be Subject To The Ubit Tax. According to Wall Street Journal, “Under current tax law, anybody investing an IRA in a private-equity fund, as Mr. Romney did, would likely incur a hefty special tax on ‘unrelated business income,’ also known as UBIT. This tax, assessed at a maximum 35% rate, is meant to discourage tax-exempt entities such as an IRA, pension plan or endowment fund from unfairly competing with for-profit, taxpaying entities by operating a business without paying taxes on it. Investing in a partnership that uses debt to buy companies would trigger the tax, experts said.
It Is Unknown If Romney Paid The Ubit Tax, But He May Have Avoided It By Using An “Offshore Blocker Corporation.” According to Wall Street Journal, “It isn’t known whether Mr. Romney paid UBIT. His filings suggest use of a strategy involving offshore funds sometimes employed to avoid it, according to several experts. One method used by tax lawyers is to have the IRA invest through an offshore affiliate of the private-equity firm, known as an offshore blocker corporation, which in turn invests the same money in the private-equity partnership. The tax is avoided because the IRA technically is investing in the offshore corporation, not in a private-equity partnership.’ [Wall Street Journal, 1/19/12]” [Wall Street Journal, 1/19/12]
5: To which additional charities did Romney contribute? Did those charities contradict his publically stated values? Already his returns showed contributions to anti-gay groups, even though he previously sought the endorsement of the Log Cabin Republicans.
Romney’s 2010 Tax Returns Showed He Contributed $35,000 To Anti-Gay Groups “Massachusetts Family Institute” And The“Beckett Fund.” According to Human Rights Campaign, “The tax returns for Mitt Romney's charitable foundation reveal that the GOP presidential hopeful has given at least $35,000 in recent years to groups actively working to halt the spread of LGBT equality and, in some cases, intentionally demonize LGBT people. [According] to CNN, Romney donated to the extremist group Massachusetts Family Institute, as well as the Becket Fund. The Massachusetts Family Institute received $10,000 from Romney in 2006, while the Beckett Fund received $25,000 in 2009. The donations came from the Tyler Charitable Foundation, set up and funded by the Romneys. The Massachusetts Family Institute has long been a vocal opponent of marriage equality, and believes sexual orientation is a choice that can be cured. From their website: ‘Our compassion is for those struggling with same-sex attraction and we encourage the healing of individuals who wish to change their choice of lifestyle…’ The group also is ruthless in its dedication to distorting programs intended to reduce bullying and make schools safer, more welcoming environments for all students. It says gay-straight alliances may violate the Constitution and parental rights, and says associated programming pushes a radical, pro-homosexual agenda.” [Human Rights Campaign, 01/24/12]
Romney Received The Log Cabin Republicans Endorsement After He Assured Them That He Would Provide More Effective Leadership Than Kennedy On Establishing “Full Equality For America’s Gay And Lesbian Citizens.” “Shortly after he won the GOP nomination to run against US Sen. Edward M. Kennedy, conservative businessman Mitt Romney - who is viewed with suspicion by some gays - wrote to the Log Cabin Club, a group of politically active gay Republicans, to assure them that 'as we seek to establish full equality for America’s gay and lesbian citizens, I will provide more effective leadership than my opponent.' The group has since endorsed Romney.” [Boston Globe, 10/17/94]
6: Did Romney claim tax deductions that were part of the stimulus? In 2010, Romney claimed a Making Work Pay Tax Deduction, although the source of that deduction is unclear without the release of additional K-1 Forms. Did any of Romney’s businesses claim tax deductions from the stimulus? Did Romney derive additional benefits from the stimulus in other unexpected ways?
The Stimulus Contained Tax Increased Benefits For Businesses Including The Making Work Pay Tax Credit, Work Opportunity Tax Credit, Cobra, Energy Efficiency And Renewable Energy Initiatives, And Net Operating Loss Carryback. According to the IRS, “Making Work Pay Tax Credit. The 2010 withholding rates, contained in Notice 1036, reflected reduced withholding. An optional withholding procedure was available for pension plan administrators. Work Opportunity Tax Credit. This expanded credit added returning veterans and "disconnected youth" to the list of new hires that businesses may claim. COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941. Energy Efficiency and Renewable Energy Incentives. See what businesses can do to reap tax rewards. Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Find information on carrybacks, an expanded section 179 deduction and other business-related provisions. The Worker, Homeownership And Business Assistance Act Of 2009 (WHBAA) expanded the five-year NOL carryback to most businesses.” [IRS, Viewed 1/24/12]
In 2010, Romney Claimed A Work Opportunity Credit – Provided No Documentation Of The Source Of The Credit, But It Passed Through A Corporate Entity. According to Romney’s Form 5884 filed with his 1040, Romney claimed a making work pay tax benefit for an employee “from partnerships, S corporations, cooperatives, estates, and trusts.” The form does not indicate which Romney entity employed the worker, not does it indicate any information about the worker. The form indicates the credit would be part of a K-1 filing, which Romney did not release. [Mitt Romney 2010 Tax Filing Pg. 77]
·         The Stimulus Expanded Eligibility For The Work Opportunity Tax Credit.  According to the IRS, “The following Recovery Act provisions affect businesses: …Work Opportunity Tax Credit. This expanded credit added returning veterans and "disconnected youth" to the list of new hires that businesses may claim.” [IRS, Viewed 1/24/12]
7: How many additional household workers did Romney employ? Did he pay them fair wages?
Romney Paid $20,603 Total In Wages To Four Household Workers In 2010. According to the Huffington Post, “IRS forms released Tuesday by Mitt Romney's presidential campaign show that despite reporting income of $21.7 million, the couple paid only $20,603 in taxable wages for household help in 2010. This figure was divided among four women: Rosania Costa ($4,808), Kelli Harrison ($8,667), Susan Moore ($2,238) and Valerie Cravens Anae ($4,890).” [Huffington Post, 01/24/12]
Romney Paid Only Half Of The Lowest Range Of An Average Housekeeper’s Salary For Only One Of Romney’s Three Houses. According the Huffington Post, “According to a number of Boston-based domestic staffing agencies, the salary range for a housekeeper is between $20 and $30 an hour, which adds up to an annual salary of $40,000 to $50,000 based on forty-hour weeks and two weeks of paid vacation a year. But this number is only for one house, and the Romneys have three houses -- a 2,000 sq. ft. townhouse in Belmont, Mass., a 5,400 sq. ft. lake house on 11 acres in Wolfeboro, N.H., and a beach house in La Jolla, Calif., that is undergoing renovations to double its size. Even if the Romneys avoided spending time in La Jolla in 2010, they spent plenty of time in New Hampshire, with regular visits in the summer from five sons and their families. Yet the Romneys still paid only half of the lowest range of an average housekeeper's salary, which raises the question of who cleaned the Romney houses the other 50 percent of the time.” [Huffington Post, 01/24/12]
8: What was Romney’s tax relationship with previously reported tax havens? In 2007, the LA Times reported Romney’s connection to funds in Bermuda and the Caymans. His tax returns for previous years could shed light on his relationships with those funds.
Romney Was “Listed As A General Partner And Personally Invested In BCIP Associates III Cayman,” A Fund That Was Registered As A Post Office Box In The Cayman Islands And Paid Him $1 Million In 2006. According to the LA Times, “In the Cayman Islands, Romney was listed as a general partner and personally invested in BCIP Associates III Cayman, a private equity fund that is registered at a post office box on Grand Cayman Island and that indirectly buys equity in U.S. companies. The arrangement shields foreign investors from U.S. taxes they would pay for investing in U.S. companies. Romney still retains an investment in the Cayman fund through a trust. Campaign disclosure forms show the investment paid him more than $1 million last year in dividends, interest and capital gains.” [LA Times, 12/17/07]
Romney “Served As President And Sole Shareholder” Of Sankaty High Yield Asset Investors Ltd. In Bermuda—The Fund Had No Staff In Bermuda And “It’s Only Presence Consists Of A Nameplate At A Lawyers Office.” According to the LA Times, “In Bermuda, Romney served as president and sole shareholder for four years of Sankaty High Yield Asset Investors Ltd. It funneled money into Bain Capital’s Sankaty family of hedge funds, which invest in bonds and other debt issued by corporations, as well as bank loans. Like thousands of similar financial entities, Sankaty maintains no office or staff in Bermuda. Its only presence consists of a nameplate at a lawyer’s office in downtown Hamilton, capital of the British island territory. ‘It’s just a mail drop, essentially,’ said Marc B. Wolpow, who worked with Romney for nine years at Bain Capital and who set up Sankaty Ltd. in October 1997 without ever visiting Bermuda. ‘There’s no one doing any work down there other than lawyers.’ Investing through what’s known as a blocker corporation in Bermuda protects tax-exempt American institutions, such as pension plans, hospitals and university endowments, from paying a 35% tax on what the Internal Revenue Service calls ‘unrelated business income’ from domestic hedge funds that invest in debt, experts say.” [LA Times, 12/17/07]
9: What did Romney’s taxes look like before his assets were in blind trusts?  Did they change dramatically as he prepared for a political career?
2003: Romney’s Investments Were Transferred Over to Blind Trusts.  By 2003, Romney’s investments were placed into a blind trust managed by attorneys from law firm Ropes & Gray.  Details of the holdings of Romney’s blind trust were not required to be disclosed according to statutes of the Massachusetts State Ethics Commission.  Romney’s family trust disclosures read, “Various investments and securities at the discretion of the trustee.  Under the terms of the blind trust, the Governor may have no knowledge of the specific holdings or management of the trust, except that the beneficiary may direct, and the trustee may report, investment allocation and performance of the trust by broad categories (i.e. publicly traded stocks, publicly traded taxable bonds, public traded tax exempt bonds, etc.).”  [Statement of Financial Interests, Massachusetts State Ethics Commission, 200320042005]
10: What was Romney’s relationship with Bain Capital affiliate Mesoamerica? Mesoamerica was a Costa Rican based investment fund that housed investments in Central American businesses. What was Romney’s tax rate on those investments?
2001-2002: Romney Held an Equity Stake in a Costa Rica-Based Private Equity Fund Which Invested in Central American Businesses.  Romney's 2001 and 2002 Statements of Financial Interests indicate that he held 1.09 percent stake in MesoAmerica Fund I LP, a private equity fund based in Escazu, Costa Rica.  The fund invested in business located in Central America.  The fund's office was located at Plaza Roble, Edificio El Portico, Piso , in Escazu, Costa Rica.  [Statement of Financial Interests, Massachusetts State Ethics Commission, 20012002; MesoAmerica, "History of Investments,"]
·  Mesoamerica’s Shared Investment Strategy Of “Sister Organizations Bain & Company And Bain Capital.”  According to Mesoamerica’s website, “The origins of Mesoamerica are based on a clear focus on strategy that we share with our sister organizations Bain & Company and Bain Capital.  Mesoamerica began in 1996 as a private equity fund; the investment banking and strategic consulting practices were added in 1998 with the creation of Mesoamerica Investments, founded by Harry Strachan, Luis Javier Castro, Alejandro Lozano and Julius Landell-Mills.”  [MesoAmerica, “About MesoAmerica,”]
11: How much did Romney save from the Bush tax cuts? Romney supports extending the Bush tax cuts permanently. It’s only fair to ask how much it saved him personally. Releasing tax returns from earlier years would facilitate a calculation.
In September, 2011 Mitt Romney Said He Would Keep The Bush Tax Cuts In Place. The Washington Post reported that “Romney said he would keep the Bush-era income tax cuts unchanged.” [The Washington Post, 9/6/11]
CBO: One-Third of The Bush Tax Cuts Went To People With the Top 1% of Income, Who Earn On Average $1.2 Million. “Fully one-third of President Bush’s tax cuts in the last three years have gone to people with the top 1 percent of income, who have earned an average of $1.2 million annually, according to a report by the nonpartisan Congressional Budget Office to be published Friday… The new estimates confirm what independent tax analysts have long said: that Mr. Bush’s tax cuts have been heavily skewed to the very wealthiest taxpayers.” [Washington Post, 8/13/04]
12. In what other countries did Romney pay taxes and claim a foreign tax credit?
Romney’s Tax Returns Showed Foreign Tax Credits And Investment In International Financial Instruments. According to Washington Post, “Republican presidential candidate Mitt Romney’s newly released tax return shows sprawling international financial interests, from Bain Capital entities based in Luxembourg to a Goldman Sachs fund in Dublin. It discusses a foreign currency transaction and details foreign tax credits. But one of Romney’s biggest foreign investments is sheltered from U.S. taxation, partly because it is based in the Cayman Islands. […]Regulatory filings show that the partnership, related to Romney’s career at the corporate buyout firm Bain Capital, is registered in the Cayman Islands. The offshore arrangement could have spared Romney a form of U.S. tax that can apply even to individual retirement accounts, experts say.” [Washington Post, 01/24/12]
Romney Claimed A Foreign Tax Credit Of More Than $120,000. According to the National Journal, Romney claimed a foreign tax credit in 2010 of more than $120,000. [National Journal, 01/24/12]

Chris Harris
Communications Director
American Bridge 21st Century