Tax Relief Lessons Learned From Celebrity Tax Woes
Recently, we have seen how serious the IRS is about collecting back taxes and penalizing those who have inadvertently or deliberately evaded their tax payments. The truth is, no one is safe from the IRS’s grasp – not even A-list celebrities like Wesley Snipes, Paul Hogan, Reggie Bush and many others. These celebrities have faced some severe IRS charges and penalties for evading large sums of tax payments.
We know that bad things happen to good people-that’s life! We also know that tax problems can result from a number of causes. However, one of the worst mistakes a taxpayer can make is to underestimate the power and reach of the IRS.
It has been a common misconception that the IRS “only goes after the big fish.” But the truth is that the Internal Revenue Service will just as gladly audit you or your next-door neighbor as they will a celebrity. So it’s important to read past the headlines and learn from these stories of celebrity tax woes to help you get the tax relief you need from back taxes and severe IRS penalties.
Tax Relief Lessons Learned from Celebrity Tax Woes #1: Ignorance of the law will end up costing you. Brazilian race car driver and “Dancing with the Stars” contestant Helio Castroneves may have legions of adoring international fans, but chances are they don’t work for the IRS.
Castroneves got caught taking income from a Dutch annuity account that he hadn’t reported to Uncle Sam. His lawyers claimed that the misunderstanding was due to Castroneves unfamiliarity with the U.S. tax code, but the IRS didn’t buy it and accused him of trying to hide the money and avoid paying the back taxes due on it. Castroneves ended up paying Internal Revenue $5 million on $15 million of unreported income.
I know from negotiating cases with the IRS day in and day out on behalf of taxpayers that the standard is the same for all Americans and ignorance of the law is no excuse. So don’t let your IRS problems end up cost you more in the long run.
Tax Relief Lessons Learned from Celebrity Tax Woes #2: You can run, but you can’t hide. In summer 2009, the five-year long battle between Australian “Crocodile Dundee” actor Paul Hogan and the Australian Taxation Office came to a head. It is a complex story, but the bottom line is, the ATO believes they are owed back taxes on $39 million AUD of Hogan’s income, which would come to about $14 million USD plus penalties. Hogan claims to have been living and paying taxes in the U.S. during the period in question, and resents the ATO’s attempt at double-dipping. In 2008, while living in California, he publicly taunted in the press that the ATO should try to “Come and get me, you miserable bastards.”
Last summer Hogan’s 101-year old mother died and he quietly slipped back into the country for her funeral. Unfortunately, Australian authorities caught up with him and refused to let him return home to Los Angeles. They eventually relented after a storm of negative publicity. This prompted Hogan to utter a historical first, “The IRS are gentlemen compared to our lot.”
Don’t mistake your chances of getting caught by your state or federal taxing authority. If you owe back taxes or have unfiled tax returns, the best thing to do is to be proactive about resolving your tax problems.
Tax Relief Lessons Learned from Celebrity Tax Woes #3: Waiting to get tax help can ruin your financial future. The Detroit News recently reported that Jose Canseco owed more than $320,000 in back taxes to the IRS, and that Internal Revenue had filed several liens against him:
The IRS filed a $121,209 lien against Canseco on Jan. 7, 2010 with the Los Angeles County Recorder of Deeds.
The state of California filed a $101,037 lien on June 2, 2009, in Ventura County Court.
The state of California filed a $29,739 lien on Dec. 12, 2008, in Los Angeles.
The state of California filed a $68,210 lien on July 7, 2008, in Los Angeles.
IRS tax liens are a popular method that the IRS uses to collect unpaid back taxes. If a lien is filed against you, the IRS can freeze your personal property, assets and prohibit you from purchasing cars and additional homes. Liens are also public record and can hurt your credit report. So don’t put yourself, your home of business in a vulnerable position! If you owe back taxes and fear you may have a tax lien placed against you, seek professional tax help now. It is best to resolve your tax debt now rather than wait until it escalates and the government takes action against you!
Tax Relief Lessons …