Daschle filed amended tax returns for 2005, 2006 and 2007 to reflect additional income for consulting work, the use of a car service and reductions in charitable contribution deductions. He filed the returns after the announcement that Obama intended to nominate him to head the Health and Human Services Department.
Most of the additional taxes resulted from unreported income from the use of a car service provided him by a close friend and business associate. The unreported income for that service totaled about $250,000 over the three years.
Daschle had unreported consulting income of $88,333, in 2007. He also had reductions to charitable contributions totaling about $15,000 over the three years covered, according to the Senate Finance Committee document. The document, marked "Confidential Draft," is a committee statement concerning Daschle's nomination.
The car service and the consulting income were received in connection with Daschle's business relationship with InterMedia Advisors of Englewood, Colo. Daschle is a limited partner and chairman of its executive advisory board. Daschle is also an independent consultant to InterMedia Advisors LLP of New York City.
Beginning in 2005, Daschle was provided the use of a car and driver by Leo Hindery, InterMedia's managing partner. The two have been personal friends for many years, the Finance Committee report said. Charges for the car and driver services were billed to InterMedia.
"Senator Daschle told staff that in June 2008, something made him think that the car service might be taxable and disclosed the arrangement to his accountant," said the committee statement. "Senator Daschle estimated that he used the car and driver 80 percent for personal use and 20 percent for business use. On January 2, 2009, Senator Daschle filed amended returns for 2005, 2006 and 2007 reporting the value of the car service as income."
The committee is scheduled to meet in executive session to discuss Daschle's nomination on Monday. A Democratic aide declined to comment on any issues discovered in the vetting process.
ABC News first reported on the tax issue Friday evening. A Daschle spokeswoman did not immediately return a message seeking comment.
White House spokesman Bill Burton said Daschle's role in the new Obama administration was not in danger of being derailed.
"The president has confidence that Sen. Daschle is the right person to lead the fight for health care reform," White House spokesman Bill Burton said. "In preparation for his nomination, Sen. Daschle and his accountant identified some tax issues and fixed them. They filed amended return with the IRS and made payments with interest."
Daschle paid the IRS taxes and interest for the error, which has delayed his confirmation.
Daschle, 61, was one of Obama's first announced Cabinet choices. He was also offered a newly created post, director of the White House Office on Health Reform. Combined, the two titles gave the former South Dakotan large sway over a campaign to change how the country addresses its health care and insurance systems.
The White House insisted that Daschle, 61, would move forward in those roles.
Jim Manley, a spokesman for Senate Majority Leader Harry Reid, also predicted Daschle would be confirmed. "He has a long and distinguished career and record in public service and is the best person to help reform health care in this country," Manley said in a statement. "Senator Reid looks forward to a swift hearing and is confident Daschle will be confirmed."
Daschle was an early Obama supporter and a campaign chairman. He was one of Obama's top advisers on health care, having seen how the Clinton administration bungled it during the 1990s, and urged Obama to make his efforts more open and accessible to the public so people would have faith in them.
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