If you ever get the chance to become famous, it may be followed by fortune. Stars that get the chance to be in the Hollywood limelight or reach tremendous athletic prowess can often make tens of millions of dollars of the course of their prime in their given profession. You don't often hear about the bulk of celebrities running into trouble with the IRS, but there have been a fair share of superstars that got into the limelight for the wrong reasons around their tax problems. Here are five celebrities who probably wish their star wasn't burning bright with the IRS.
- Wesley Snipes - I have to admit that Wesley Snipes played one of my all time favorite roles in White Men Can't Jump. When he tells Billy, "It's hard, hard work making you look so bad." Mr. Snipes 'bladed' himself by owing roughly 17 million dollars to the IRS which got him convicted to a three years sentence. This happened to be one of the longer sentences every handed out to a famous celebrity. The moral of the story here is file your tax returns because Mr. Snipes did not in 1996, and also claimed a 7.3 million refund in 1997 (source: Wikipedia).
- Willie Nelson - We all know Willie Nelson has some great records as a singer and artist. He was also a huge defender of Marijuana and good friends back in the days with President Jimmy Carter. In 1990, Willie really tightened up that headband when the IRS seized his property and claimed he owed a gigantic sum of over $16,700,000 in federal taxes. Actually, this is a classic case of making sure your deductions are ironclad when you file your taxes, as the IRS looked at deductions dating back to 1972 through 1984 which ultimately caused the problem due to disallowed deductions compounded with penalties. Ultimately, Willie was able to settle for 6 million and still couldn't pay the bill.
- Nicholas Cage - Here's another actor who has made a ton of famous movies we've all enjoyed. Who didn't love him in Raising Arizona and Face Off? I can even remember one of his first starring roles in a cult flick called Valley Girl where Modern English made the song I'll Melt With You famous. However, Mr. Cage didn't seem to think he needed to pay taxes on some of the paychecks he received from making movies. In 2007, he made over 24 million dollars from two movies on which he decided not to pay taxes. (source: lionwhitaker.com) He currently got himself into hot water to the tune of 14 million dollars owed to the IRS. The problem about trying to settle these bills is that the IRS isn't real compromising with people who have a high net worth like Mr. Cage.
- Martin Scorsese - I'd imagine the first time he realized he owed a big tax bill those eyebrows of his rose as high as we would have ever seen them go in our lifetime. The Academy-Award winning director made headlines last March when it was revealed that the IRS had a levied a $2.85 million lien against him. And in a plot twist worthy of Casino, the bill was delivered on Valentine's Day. (source: fiscaltimes.com). This wasn't the first run in for Mr. Scorsese with the IRS with tax lien issues dating back to 2002. If he really was a Goodfella, he'd just pay his tax bills on time like the rest of us.
- Ja Rule - The once famous rapper owed 1 million plus in penalties plus he got a two to three year prison sentence just simply from not paying tax for some big years he had between 2004 and 2006. Ja Rule - here's the rule- pay your taxes!
These are just five of the ones that made your smart money moves headlines, but tell me who else we should have added to the list! There are lots of ways to get famous, but not paying your income taxes is a bad idea on how to make the list!
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Written by:
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder of oXYGen Financial, Inc - The Leaders in Gen X & Y Financial Advice
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