President-elect Barack Obama's nominee for Treasury Secretary, Timothy Geithner, failed to pay Social Security and Medicare taxes for himself for four years and employed a housekeeper whose immigration documentation lapsed while in his employ.
Senate Finance Committee Chairman Max Baucus called a meeting with committee members to discuss the matter inside his office Tuesday.
Geithner disclosed to senators earlier in the day that he had failed to pay $34,000 in taxes from 2001 to 2004, a last-minute complication in an otherwise smooth path to confirmation.
Sources say Geithner also hired a housekeeper whose immigration papers expired during her employment in 2004 and 2005.
The woman, whose name has not been released, eventually obtained a green card to work legally in the U.S., and immigration authorities did not charge her with wrongdoing.
Senate Majority Leader Harry Reid told reporters after the revelations that he still believes Geithner is "extremely well-qualified" for the post.
"There was a few little hiccups, and that's basically what they are. I am not concerned at all," Reid said.
But an aide to finance committee member Sen. Chuck Grassley, R-Iowa, said the matter is "serious."
"Whether it's disqualifying is to be determined," the aide said.
Before becoming president of the Federal Reserve Bank of New York, Geithner worked for the International Monetary Fund from 2001 to 2003. He paid all of his income taxes on his IMF income, but made a "common mistake" on his tax returns with regard to self-employment taxes, Obama transition aides told reporters Tuesday.
Incoming White House press secretary Robert Gibbs defended Geithner, saying, "He's dedicated his career to our country and served with honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed."
"He made a common mistake on his taxes, and was unaware that his part-time housekeeper's work authorization expired for the last three months of her employment," Gibbs said.
"We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country," he added.
Utah Republican Sen. Orrin Hatch, a member of the Senate Finance Committee, also defended Geithner.
"I still support him. I have no problem," Hatch told FOX News. "He's a very, very competent guy."
Baucus told reporters that Geithner's errors -- though "serious" -- do not disqualify him from becoming Treasury Secretary and that he hopes Geithner can be confirmed by Inauguration Day.
"These errors were not intentional; they were honest mistakes," Baucus said after he and other committee members met with Geithner.
FOX News' Trish Turner and the Associated Press contributed to this report.