Celebrities Who Ignored Tax Deadlines
Celebrities who Ignored Tax Deadlines – Ignoring tax deadlines and failing to pay outstanding tax balances can have severe consequences. Interest and penalties accumulate over time and can amount to a significant financial burden. In addition, the IRS has the authority to use more aggressive collection techniques such as tax levies, tax liens and wage garnishments when outstanding tax balances are not paid in full. The following examples illustrate the consequences suffered by some well known individuals who ignored their tax responsibilities.
- This celebrity was slapped with a $6.2 million tax lien.
Although actor Nicolas Cage earned over $40 million in 2009, the IRS slapped him with a $6.2 million tax lien in that same year. He was apparently spending more money than he earned on such luxury items as yachts, homes, art, jewelry and vintage cars. It has recently been reported that Cage is trying to repair his finances and pay his tax debt by selling some of his properties as well as an entire island in the Bahamas!
- This celebrity was arrested for state income tax evasion.
In December of 2012, actor Stephen Baldwin, the youngest of the Baldwin brothers, was arrested for state income tax evasion. The charge was due to the fact that he owed the State of New York over $350,000 in back taxes. This past March, he pled guilty to felony charges and paid $100,000 of the amount he owed. He must pay the balance of his past due tax liability by the end of this month in order to avoid jail time.
- This celebrity accumulated a back tax balance of over $400,000.
When actor Gary Busey filed for bankruptcy protection in December of 2012, he was able to discharge more than $50,000 in liabilities. However, because tax debt is not covered by bankruptcy protection, he was left with an outstanding tax debt of $451,000. Time will tell whether Busey will suffer legal consequences or be able to negotiate a tax settlement agreement with the IRS to pay his back tax bill.
- This celebrity is over $10 million in debt, most of it due to back taxes.
When singer Dionne Warwick filed for bankruptcy protection this past March, she listed only $25,000 in assets and over $10 million dollars of debt. Since most of this debt is apparently due to back taxes which are not relieved with a bankruptcy petition, she still faces an uphill financial battle. However, she is currently living in Brazil and working to pay her tax debt. Since she has an earning capacity of over $20,000 a month, her situation may not be as dire as some others who have monumental tax liabilities.
- This celebrity was hit with multiple tax liens.
The IRS has filed multiple tax liens against R&B singer Toni Braxton in an attempt to collect almost $400,000 in back taxes owed for tax years 2008 and 2009. Although Braxton has filed for bankruptcy protection twice in recent years, the filings did not eliminate her tax debt. To date, there is no report that Braxton has resolved her tax problem.
- This celebrity owes more than $1.5 million in unpaid taxes.
A tax lien was originally filed against O.J. Simpson in 1999 in an attempt to collect more than $1.5 million in delinquent taxes. However, due to the fact that Simpson is currently serving a 33-year prison sentence in a California correctional facility, it is unlikely that he will be able to resolve his tax bill!
As the above examples illustrate, it is never a good idea to ignore your tax responsibilities. The IRS is a powerful collection agency and will take whatever steps are necessary steps to collect the money they are owed. As the above examples illustrate, the worst choice a delinquent taxpayer can make is to ignore outstanding tax liabilities and hope they will go away. When the necessary funds are not available to pay a tax balance in full, it is advisable for a taxpayer to contact the IRS and attempt to take advantage of one of the many tax settlement options they offer.
If you have a back tax balance that you are unable to pay, our tax settlement professionals can help you determine the best course of action to resolve it. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years of in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances. Contact us by phone at (877)-889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation.