Celebrities with tax problems

Many average Americans have tax problems – tax liens, judgments, filing issues.  Well, the well heeled and famous also do too and many times they get the star treatment.

Nicolas Cage – owes $6.3MM in back  taxes from 2002-2004 and 2007.  He is suing his business manager for taking extravagant tax deductions and not being told about it.

Wesley Snipes – owes $17MM and has been found guilty of defrauding the government.  His tax advisors took the bizarre defense that income taxes are not legal.

Marc Anthony – owed $2.5MM for failure to file taxes for 5 years in 2007

Joe Francis – is the owner of Girls Gone Wild, has spent 10 months in jail for conviction of tax evasion in 2007

Sinbad – owes $8.2MM in back taxes and filed for BK

Pamuela Anderson – owes $500,000 in back taxes and penalties

Chris Tucker – owes $11MM in back taxes

What I expect happens is that many celebrities get some huge windfalls in compensation and profits but want to keep most of it.  They either hide (don’t file), find fraudulent individuals to file for them, or just don’t pay the taxes due.  Remember at their level of income, taxes can easily be 50% of your net income.  Also many celebrities have huge expense budgets for wardrobe, travel, entertainment, entourage, and many of those expenses may not be deductible since they are personal in nature and are hard to prove with a business connection.  IRS frequently targets them since they can publicize their cases to scare the public + many cases it’s quite easy to prove that they owe the back taxes ( income is frequently published in trade journals, magazines)

The lesson here is when you are in the spotlight, you have to keep your nose clean.