Julie Jacobson/AP
Republican presidential candidate, former Massachusetts Gov. Mitt Romney greets supporters after speaking at a rally in Las Vegas Friday.

Romney tax returns: What’s missing in his report?

Pundits, political partisans, and amateur CPA’s are poring over the numbers in Mitt Romney’s tax returns. What’s missing, tax experts say, are the details of Romney’s retirement account from Bain Capital, including investments in offshore accounts in Bermuda and the Cayman Islands.

It’s no coincidence that Mitt Romney chose a Friday afternoon to release more information about the income taxes he pays. In Washington, that’s known as “news dump day,” the time when most people are moving into weekend mode and whatever bad news an elected official has to report – usually it’s the White House – is largely ignored.

Unless, that is, there’s been months of controversy and buildup in a presidential election year and the issue in question gets to the essence of a candidate’s image (if not character).

That’s certainly the case with Mr. Romney’s personal wealth, the “47 percent” of the electorate he seemed to write off in a private meeting with campaign donors, and what’s already known about the tax-sheltered offshore investment accounts that would make him (as Forbes Magazine calculates) “the wealthiest White House occupant ever.”

So it is that the report by Romney’s tax preparer (PriceWaterhouseCoopers) and the friend who manages Mr. and Mrs. Romney’s three trusts remains very much in the news.

RELATED: Five ways Obama and Romney differ on taxes

As pundits, political partisans, and amateur CPA’s pore over the numbers, what’s missing from Romney’s report seems most provocative. The full returns for 2010 and 2011 have been released, but only a statement on the overall federal tax rate paid for the previous 20 years.

What’s missing, tax experts say, are the details of Romney’s retirement account from the Bain Capital investment firm he started and ran for years. Much has been made of Romney’s investments in offshore accounts in Bermuda and the Cayman Islands. Isn’t that a way of avoiding taxes, critics ask?

No, says the Romney campaign in a “frequently asked questions” site about the 2011 return released Friday:

“The investments by the blind trusts in funds established in the Cayman Islands or other jurisdictions are taxed in the very same way they would be if the shares were held in the US rather than through a Cayman fund. No taxes are evaded or reduced. These funds are all registered with the IRS and report all income to investors and the IRS, just like domestic funds. Whether in Bermuda or Boston or elsewhere, there is no difference in how they are taxed.”

Well, maybe.

“The taxes you evade by putting your money in the Caymans aren’t your own personal income taxes, but your offshore investment fund’s corporate income taxes,” writes Timothy Noah in The New Republic. “In other words, the Romneys aren’t evading income taxes by putting their money in the Caymans. The fund they put their money into is evading taxes by parking itself in the Cayman Islands. As a result, that fund (and therefore the Romneys) get to keep more of the profits. Why evade taxes when you can get somebody to do it for you?”

In any case, Stanford University law school professor and tax law expert Joseph Bankman told the Associated Press, "It's the Bain years we'd really need to know to have a full assessment of his tax strategies." Releasing details for 2010 and 2011, Mr. Bankman said, "only raised these questions, but they can't provide real answers."

Responses to Romney’s tax news were predictably partisan.

Sen. John McCain (who required far more tax information when he was considering Romney to be his running mate in 2008), called it “an incredibly detailed look at his finances.”

“Now that the most recent tax return has been released, it’s time to get back to discussing the issues that voters care about,” Sen. McCain declared.

Democrats aren’t about to let the subject go.

Stephanie Cutter, deputy campaign manager for President Obama, said the release of Romney's 2011 tax returns "confirms what we already knew – that people like Mitt Romney pay a lower tax rate than many middle-class families because of a set of complex loopholes and tax shelters only available to those at the top. Yet, Mitt Romney still wants to give multimillionaires an additional $250,000 tax cut at the expense of middle-class taxpayers who will see their taxes go up."

Many critics noted the politics behind the Romneys not declaring as much in charitable donations as they might legitimately have in order to be able to say that they paid at least 13 percent in income taxes in each of the last 10 years. Some cynics even noted that Romney could amend his 2011 tax return after the election, seeking a refund for the tax deduction.

Will Romney’s latest tax information put the issue behind him?

The Romney campaign certainly hopes so. But Republican strategist and commentator Alex Castellanos (who worked on Romney’s 2008 presidential campaign) doesn’t think it will.

“This will drag Mitt's taxes back into the debate,” he told Politico. “And there's not many days left. I just can't imagine why they would do this. There are 40 days left and you have now made more of them about Mitt's taxes.”

RELATED: Five ways Obama and Romney differ on taxes

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