The statute had run on those two years when he was audited by the IRS. He was under no legal obligation then (when audited) or now to pay those taxes.

This kind of thing happens all the time. Assume you are one of those FNIAs who prepares their own return and innocently (or not) mishandles reporting something on your return year in and year out. IRS audits you and adjusts your returns. If there is no indication of fraud, the statute of limitations is three years. So, who here would go back, oh, say six more years and pony up all those taxes when not legally required to ?? I wouldn't advise someone to.

From what I gather, he did include these IMF payments in income, but did not report them as payments subject to S/E tax. So, the Government lost out on the medicare tax portion (2.9%) of his IMF payments. (I assume his salary with the Fed Reserve is subject to FICA and his earnings were over the FICA limits, which in those years was 80,400 and 84,900. )

That said, I doubt he's the ONLY guy in America who can fill the position of Treas. Sec. If he is, we is in trouble.