Celebrity Tax Cheats

Celebrities must pay taxes too!

Being a celebrity does not relieve you from tax responsibilities. That’s the lesson that some in Hollywood have learned the hard way.

Celebrities who have gone to jail

Willfully failing to file tax returns and pay taxes (tax evasion) can be a criminal activity that results in jail time, as several celebrities can attest. Examples:

• Wesley Snipes got a 3-year sentence for willfully failing to pay taxes on $13 million that he earned between 1999 and 2001.
• Richard Hatch, who was the first winner of the reality show Survivor, spent time in jail for his willful failure to pay tax on his winnings.
• Joe Francis of Girls Gone Wild claimed more than $20 million in fraudulent deductions, which cost him 1 year in jail.
• Leona Helmsley spent 18 months in jail for tax evasion; she claimed that renovations on her estate were deductible and allegedly said, “We don’t pay taxes. Only the little people pay taxes.”

Celebrities with big tax tabs

Some celebrities run up big tax tabs that continue to accrue interest and penalties until paid. While they may escape criminal penalties, they can be subject to a variety of civil sanctions, including liens on their homes, frozen bank accounts, and, even worse, bad press! Examples:

• Marc Anthony owes $2.5 million; it’s not clear whether JoLo is jointly and severally liable for this money.
• Toni Braxton owes nearly $400,000.
• Nicolas Cage currently owes $14 million after just settling up a $13 million tax bill.
• JaRule has an outstanding tax bill exceeding $1 million.
• Val Kilmer had tax liens placed on his property in 2009 and 2010.
• Lindsay Lohan owes $140,000 for 2010 after supposedly settling a $900,000 tax lien for 2009.
• Willie Nelson owed $16.7 million in back taxes some years ago; he tried to pay by releasing an album, The IRS Tapes: Who’ll Buy My Memories? Before he could earn the money, however, the IRS sold off his assets.