What you can learn from the tax troubles of the stars
The tax man cometh in Hollywood, too.
Many celebrities have run into trouble with the IRS for filing late or making false claims on their returns, which resulted in huge fines and even jail time.
There’s still time to make the Tax Day deadline on Tuesday 4/18, so don’t make the same mistakes as these infamous tax evaders below.
Pay before play. The IRS emptied the bank accounts of “90210” star Tori Spelling and her husband Dylan McDermott to cover their $707,487.30 tab from an unpaid 2014 tax lien, Page Six reported. Spelling hinted at financial woes in her 2013 book, “Spelling It Like It Is,” writing that, “It’s no mystery why I have money problems. I grew up rich beyond anyone’s dreams. Even when I try to embrace a simpler lifestyle, I can’t seem to let go of my expensive tastes.”
Be honest. “The Real Housewives of New Jersey” stars Teresa and Joe Giudice pleaded guilty to 39 federal fraud charges in 2013, which included both overestimating their income when applying for loans, and hiding how much money they were making once their finances improved. The government also accused Joe of failing to file his returns between 2004 and 2008, when he reportedly made almost $1 million. Teresa served 11 ½ months in prison for bankruptcy fraud, and Joe is currently serving a three-year prison sentence.
Don’t make questionable claims. “Jersey Shore” star Mike Sorrentino and his brother Marc Sorrentino are in a legal Situation. They were arraigned on tax evasion, structuring and falsifying records and other charges in federal court Monday, including claiming luxury cars and clothes as business expenses. Marc was also charged with obstructing a grand jury investigation. Both face up to five years in prison, and Marc faces up to 20 years behind bars. And Martha Stewart got in hot water with the IRS in 2003 for fighting a $220,000 tax bill from New York State, arguing that she didn’t spend enough time in New York to have to pay state taxes. A judge forced her to cough up the cash after noting one of her books said she had a summer house in East Hampton.
Pay on time! Most A-list IRS issues fall under the “tax evasion” bracket, such as Lauryn Hill serving three months behind bars in 2013 for failing to file returns between 2005 and 2007 that added up to $1.8 million. The IRS froze Lindsay Lohan’s assets in 2012 until she paid back one of her two years of back taxes from 2009 and 2010, which added up to about $234,000. Wesley Snipes spent more than two years in jail for racking up $17 million in tax debt between 1994 and 2000. And other stars caught delinquent on their tax payments include Willie Nelson, O.J. Simpson, Fat Joe, Pamela Anderson, Lionel Richie and Al Capone.
Check in with your accountant. It pays to double-check that whoever prepares your taxes has done his or her job correctly. Christie Brinkley had a tax lien filed against her in 2011 for failing to pay more than $500,000 in taxes on one of her properties. She told E! News it was all a mistake, stating, “I was surprised to learn of the tax lien filing and took immediate steps to rectify this matter,. I discovered the tax lien was indeed the result of an error. My taxes will be paid in full by Wednesday, December 7th and I expect the tax lien to be released immediately thereafter. I regret not paying more attention to my accounting.”
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