Offshore-investing Mitt Romney has withheld nearly all of his tax records, as we now know. But it turns out that he may have to reveal some of his most intimate financial information after all, and the timing couldn't be worse.
This week, someone very knowledgeable about taxes—an anonymous tipper, who I can't name or I'd have to kill you—let me know about some sweeping legislation approved by President Obama in 2009. The complicated series of reforms were designed to catch tax evaders who hide money in overseas tax havens, but the only part that's relevant to our interests is IRS Form 8938.
Form 8938 will require Romney to detail all his money in overseas accounts, at the risk of criminal penalty, and could cause a lot of trouble for Romney's campaign this fall.
Romney promised to release his tax returns for 2011 as soon as they're done, and he's filed for an extension, which gives him until October 15, about three weeks before the election. In the words of my source, Romney's taxes must include Form 8938, which requires him to "list the maximum value of each of his non-US investments as part of his tax filings."
Previously, we've seen estimates of part of Romney's overseas fortune. But this form is more specific than what we've seen before. It requires taxpayers to include "any financial account maintained by a foreign financial institution" and "any stock or securities issued by someone that is not a US person, any interest in a foreign entity, and any financial instrument or contract with an issuer or counterparty that is not a US person."
For at least a week, Form 8938 will drive the news cycle as reporters pick through every cent Romney has invested in offshore tax havens. Basically, it's going to be a very bad week to be Mitt Romney.
This raises a bunch of questions: Why would Romney October Surprise himself like this? Did he not even know Form 8938 existed? Will he try to dump the returns in August, during the Olympics, when he believes nobody is paying attention?
Form 8938 turns Romney's impending tax returns into a very specific threat to his own campaign; the information could be potentially more damning than anything we've seen before.