Mehmet Oz, President Donald Trump's nominee to lead the Centers for Medicare and Medicaid Services, may have "significantly" underpaid Social Security and Medicare taxes in recent years, according to a memo by Democratic staff on the Senate Finance Committee seen by Bloomberg News.
Oz paid no Social Security or Medicare taxes in 2023 and "negligible" amounts in 2022, the memo said. Oz told Congressional staffers he wasn't liable for the taxes on certain income from his company, which is run as a limited liability company, because of a provision called the "limited partner exception," according to the memo.
At issue is the income the TV doctor made from Oz Property Holdings LLC, the entity which houses Oz Media LLC. The limited partner exception allows certain partners with a small role in a business to avoid Medicare and Social Security taxes on those earnings.
In the memo, Democratic staffers argue Oz was "actively involved in the activities of this limited liability company that boasts his name" and therefore owes the taxes.
A spokesman for Oz said he cleared the ethics review for the CMS role but didn't respond specifically to the tax question. Christopher Krepich said he is "in compliance with the law."
The memo details as much as $440,000 of Social Security and Medicare tax that Oz allegedly didn't pay in the 2021 to 2023 period by relying on this exception.
"Not only does Dr. Oz want to gut Medicare, but he evidently cheated on his Medicare taxes," Democratic Senator Elizabeth Warren, a member of the Finance Committee, said in a statement to Bloomberg. Oz is "demonstrating that he cannot be trusted to protect Medicare and Medicaid for millions of people."
Senate Finance Committee Chairman Mike Crapo said Oz "followed the law and provided significant amounts of documentation to substantiate his tax return positions" in a statement to Bloomberg.
There's little public information about Oz Media's finances. In Oz's financial disclosures to Senate for the CMS nomination, he didn't detail how much he made from Oz Media. A financial disclosure filed in 2022 when he ran for Senate in Pennsylvania showed he'd made $7 million in income from Oz Media, which came via Oz Property Holdings.
Medicare and Social Security are financed by payroll taxes shared by workers and their employers. People who work for themselves are subject to other taxes to fund these programs.
Corporate structures like partnerships, or limited liability companies that are treated as partnerships, can provide tax benefits.
"It's one of the reasons that people pick a structure like this, to help minimize their overall tax costs," said Tim Steffen, director of advanced planning at wealth management firm Baird. He wasn't commenting on Oz's situation specifically.
Oz, a surgeon who shot to fame as a TV doctor,
The celebrity physician is scheduled to face the Finance Committee on Friday as he seeks Senate confirmation to lead CMS, an agency which oversees about $1.7 trillion in federal spending.
A spokesperson for the Department of Health and Human Services, which oversees CMS, could not be reached for comment.
Oz was a surprise pick when Trump
These programs are already becoming flashpoints as Trump and billionaire Elon Musk seek to slash federal spending. The Republican-controlled Congress is
According to the Finance Committee memo, Oz's accountant told Senate staff on March 7 that he was relying on the limited partner exception to avoid Social Security and Medicare taxes, a position the memo said contradicted the Department of Treasury's interpretation.
The boundaries of which limited partners qualify for the exemption are currently being litigated by the courts.
