What do Willie Nelson, Arnie the Gov, Wesley Snipes, Joan Baez, Nicolas Cage, Joe Francis, Sinbad, Richard Hatch( Enjoying jail ?), Dionne Warwick, Pete Rose, and Val Kilmer all have in common? Besides the obvious of stardom they do not pay their federal income taxes. What you going to do, what you going to do, Bad Boys, Bad Boys.
I am a former IRS Agent and Instructor with the IRS for 10 years and I have been in private practice for 29 years. I have founded a company called called Fresh Start Tax L.L.C that deals with the problem of people who do not pay or file their incomes taxes timely. We have represented a fair amount celebrities in the past and they do share some common traits about paying their fair share. I believe there are a couple of reasons this does not happen.
It seems there is a larger number of celebs just not paying there federal taxes. With all the money they make and have you would think they would just write a check, be done with it, gone. But not so fast!
Keep in mind we do not have all the facts on each case and there may be very good reasons these events took place. So the comments I am making are general traits what I have personally found to exist does not necessarily apply to any one celebrity.
It seems there is a larger number of celebs just not paying there federal taxes. With all the money they make and have you would think they would just write a check, be done with it, gone. But not so fast.
The reasons they do not pay their taxes:
1. First and foremost, bad professional advice. You would be a fool of fools representing a celebrity and not have them pay their fair share of taxes. The negative press is not worth coughing up the payment to the fed., Celebrities endorsements stops and your name get tarnished among those conservatives who have tremendous buying power. The celebrities should fire their professionals who gave them this advice ASAP. However are just so brash like Richard Hatch it would make no real difference.
2. Some feel they are above the law. Some feel because they have celebrity status the Uncle is going to let them slide. Let me tell you a pure truth. As a former IRS Agent, I would light up when I got a celebrity case. From my boredom at the IRS I could make a name for myself. Agents absolutely find it to be a pure joy when these cases come their way. Plus they can brag to all the other Agents who is in their case inventory. signing your name on a celebrity Federal Tax Lien is BIG stuff.
3. Bad Communication. In some cases the professional firms communication with the celebrity breaks down. Many celebs are on location or out of the country and some of the tax information is time sensitive and because of this federal tax liens get filed. Many times the taxes are paid immediately. There is still no excuse for this to happen. From filing the tax return to the filing of federal tax lien is the usual 5 months. Some one was sleeping on the job. Send a text for God sake!
4. Some are just broke. With the numbers of celebrities I have handled in the past it is safe to say, some have just spent all their money and are flat broke. Usually these tax deficiencies had come from tax periods 3 or 4 years ago when they had money, they cheated, got caught and now are paying the fiddler.
5. Some just pay the numbers game. With the chances of a IRS Tax Audit slim, the celebrities and their representative roll the dice figuring the Uncle will never audit them. At their income levels they have a 25% of a tax audit. Many are unaware of the fact that the more money you make the higher chance of a tax audit.
With all this being said, I just do not feel sorry for those who have failed to honor our Uncle. We have to pay and there is no reason they do not PAY their homage to Uncle as well.
What I do not understand, Dionne, with all your psychic friends, how did this happen?
