Back tax debt happens to many people. The IRS does not discriminate – they aim to collect overdue taxes from everyone, including celebrities. Famous people have IRS troubles just like average people.
Some celebrities seem to think they are immune from IRS trouble, but as countless celebrity tax cheats have learned, no one is beyond the long arm of the IRS sniffing out unpaid tax problems. Let these celebrity tax cheaters’ pains be your gain. Here are some important tax evasion lessons you can learn from these celebrity tax cheaters:
Sophia Loren’s celebrity tax cheating lesson: Even an innocent spouse can end up doing jail time. The tax evasion case against the Italian screen siren had more to do with her celebrity tax cheater husband Carlo Ponti’s unpaid taxes, but Loren ended up doing 17 days of a 30-day sentence in a Naples jail for tax evasion. If you file a joint return, your neck is on the tax evasion line for your tax cheater spouse’s taxes. Many couples appoint one partner to handle the finances. If you feel your tax cheater spouse hasn’t been faithful with their taxes, take your returns to a tax attorney or tax resolution specialist to see if you qualify for innocent spouse relief.
Abbott and Costello’s celebrity tax cheating lesson: Don’t let your nice guy image get in the way of avoiding a tax evasion problem. Although he played the fool in the movies, Lou Costello (the dumb one of the comedy duo) was the more astute businessman and Bud Abbott (the smart one) was constantly making bad business decisions.
Sometimes our self or public image prevents us from being assertive with our business and financial advisers when it comes to the topic of tax evasion. This lack of follow-through cost the celebrity tax cheating comedy duo dearly. According to Wikipedia, in 1956, the Internal Revenue Service charged the celebrity tax cheaters with tax evasion, forcing them to sell their homes and most of their assets, including their lucrative film rights. In 1957 they formally dissolved their partnership. Don’t let a tax evasion problem destroy your partnerships, always asks tough tax evasion questions of your financial team!
Wesley Snipes’s celebrity tax cheating lesson: Write your politics on your blog, not on your tax forms. According to his tax evasion trial coverage, one of the reasons celebrity tax cheater Wesley Snipes didn’t file his tax returns was due to bad tax evasion advice that was politically motivated. Although failure to file your taxes is a misdemeanor, celebrity tax cheater Snipes was sentenced to three years of jail time and millions in back taxes and tax evasion penalties. You may have heartfelt political or religious feelings about how your taxes are used, or even the validity of the U.S. Government to levy taxes, but put those tax evasion thoughts in your blog, not on your tax forms. Once you file (or don’t file) your taxes, it becomes tax evasion, which can send you to jail.
Richard Hatch’s celebrity tax cheating lesson: Don’t “forget” to pay taxes on income (especially when 51 million people saw you get it). As the first winner on Survivor, celebrity tax cheater Richard Hatch argued that he wasn’t guilty of tax evasion because he believed that CBS had paid the taxes on his million-dollar win (despite clear language in his contract explaining that he was liable for paying all taxes). If you get advice that says you don’t have to pay taxes on income, get a second opinion. If you make serious bucks, have your financial team’s tax work audited by another firm.
Darryl Strawberry’s and Pete Rose’s celebrity tax evasion lesson: What part of INCOME taxes don’t you get? At one time, celebrity tax cheaters Darryl Strawberry and Pete Rose were baseball’s biggest stars, making their autographed memorabilia very valuable. While these celebrity tax cheaters could rattle off their statistics for every season, the one figure they forgot to include was the income from autograph and memorabilia shows. When they autographed their tax returns without that income, they became celebrity tax evaders. Celebrity tax cheater Strawberry was ordered to pay $450,000 in back taxes, while celebrity tax cheater Rose had to pay $366,000 and went to jail for five months for tax evasion. If you’ve “forgotten” some income (such as eBay profits), you’re a tax cheater.
To read more, here is the most recent round up of “Celebrity Tax Woes” stories shared on our blog.
You may envy the fortune and glory of these celebrity tax cheaters, but if you take these celebrity tax evasion lessons to heart, you’ll have something more valuable than fame or fortune. You’ll have your financial and personal freedom.
Posted by: Daniel Stoica Accounting Professional