It was only a few short weeks ago that Nancy Killefer, a Clinton-era veteran of the Treasury Department, was tapped by President Barack Obama to become the nation's first chief performance officer, a position created to cut through government red tape and reform budgetary systems.

But today the 55-year-old Killefer (WhoRunsGov bio) announced she was withdrawing her candidacy today, amid questions about her failure to pay employment taxes for household help for about 18 months, The Associated Press reported.

In 2005, the District of Columbia filed a $946.69 tax lien on Killefer's $1.7 million home in the affluent Wesley Heights neighborhood of Northwest Washington "for failure to pay the unemployment compensation tax."

Killefer owns the nine-bedroom home with her husband, Georgetown economics professor Robert E. Cumby, according to city real estate records.

She's not the first to face questions over "nanny" tax issues; At least 10 nominees for top-level cabinet and government positions since Clinton have come under fire for similar problems, including two candidates for attorney general under Clinton -- Zoe E. Baird, an attorney for Aetna in Connecticut, and Kimba Wood, a Reagan-nominated federal judge in New York.

In a letter to Obama, she admitted that the tax issue in the "current environment" would create a "distraction":

I recognize that your agenda and the duties facing your Chief Performance Officer are urgent. I have also come to realize in the current environment that my personal tax issue of D.C. Unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid. Because of this I must reluctantly ask you to withdraw my name from consideration.

I am deeply honored to have been selected by you and you have my deep appreciation for your confidence in me. You have my heartfelt support and best wishes for success in all your endeavors.

At a Jan. 7 press conference, Obama called Killefer "uniquely qualified" to serve as the nation's first CPO, calling her "an expert in streamlining processes and wringing out inefficiencies so that taxpayers and consumers get more for their money."

Killefer had also been slated to become the deputy director for management at the Office of Management and Budget.

Killefer is a senior director in the Washington office of the management consultant firm of McKinsey & Co. Inc.; she served as the Treasury Department's chief operating officer under former President Bill Clinton.