Rubio, Cruz and Kasich didn’t disclose documents that would provide a fuller picture of their finances, including schedules listing itemized deductions and detailing business income or statements providing supplementary information. By contrast, Democratic front-runner Hillary Clinton released returns for several years that included schedules and statements.
In Rubio’s case, the 2012 return demonstrates how partial disclosure -- without schedules or statements -- might give voters an inaccurate impression. That’s because the return says the Rubios made $200,000 in “2012 estimated tax payments” -- a line on the 1040 income-tax form that indicates the payments were made sometime in 2012. Under IRS rules, people with significant earnings that aren’t subject to wage withholding -- say, business income from publishing a book -- are expected to make estimated tax payments during the year. However, regardless of what the return indicates, the Rubios didn’t pay estimated taxes in 2012 “because he didn’t know how much he’d get paid until the end of the year,” said Conant, the campaign spokesman.
While Conant said subsequently that an estimated payment of $200,000 “was paid before October 15” in 2013, two accountants who examined the Rubios’ tax returns for Bloomberg News concluded otherwise, based on the amount of the penalty and interest the couple paid.
Charles Sarowitz, the founder of Sarowitz Milito & Co., a tax-preparation and accounting firm in Brooklyn, New York, and Cherry Hill, New Jersey, used industry software to conclude that the amount, $11,733, was too high for the $200,000 to have been paid any time before Oct. 15, 2013. Sarowitz’s findings were confirmed independently by William C. Lankford Jr., a CPA with Moore Stephens Tiller LLC in Atlanta.
On the return, after deductions and exemptions, the Rubios reported their tax for the year was $279,827. Then they reported almost $32,000 in federal withholding and the $200,000 in estimated tax payments, the return shows -- bringing the tax bill reflected on their return down to $48,171 before penalties and interest.
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However, a screen shot of unreleased tax documents that Conant provided to Bloomberg News shows that the Rubios’ penalty and interest were actually calculated on Oct. 15, 2013 on the full amount, $248,171. The documents, which are labeled as statements of the interest and late-payment penalty, also record a $200,000 “estimate payment” against that amount on Oct. 15, 2013, leaving a balance of $48,171 before the penalty and interest are added. The document doesn’t say when the balance was paid; Conant said it was on the same day.
While the 2012 penalty and interest charges were the largest, the Rubios’ returns indicate that they paid penalties and interest in six of the last seven years. The 2014 return includes a note that says, “SEE STATEMENT FOR INTEREST AND PENALTIES NOT INCLUDED,” but the statement wasn’t released. Conant said in an e-mail that the couple paid $522 that year.
In general, the Rubios’ returns show simply that “he’s not paying on time,” Sarowitz said.
The IRS brings three types of penalties for late tax payments or late returns: An “estimated tax penalty” applies when taxpayers don’t make timely payments during the tax year through withholding or quarterly pre-payments. A “failure to pay” penalty is assessed at 0.5 percent for each month that a tax bill is overdue, plus interest. A “failure to file” penalty, levied when taxpayers miss the mid-April deadline and fail to seek extensions, is 5 percent each month, or 10 times the “failure to pay” penalty. It’s capped at 25 percent, plus interest.