Even Famous People Have Tax Troubles

by Ron Haynes

Pay your taxes. Those three little words will keep you out of the hottest of hot water since the Internal Revenue Service won’t tolerate anything less! And no one I know wants trouble with the IRS. With the US tax deadline looming, I thought I’d highlight some high profile people with tax problems in the past with one of their more memorable quotes. Enjoy !

Tim Geithner

tim_geithnerAt the top of the list only because he is responsible for the IRS and by default, for making sure everyone else pays their taxes, former Treasury Secretary Tim Geithner was exposed during his Senate confirmation hearings for failing to pay $35,000 in self employment taxes. Ironically, as President of the Federal Reserve Bank of New York, Geithner was required to file an annual ethics statement noting any taxes due or unpaid. Over several years, Geithner failed to pay Social Security taxes, even though he was advised by his employer (The Federal Reserve) to do so, signed an agreement indicating that he understood that such payments were his responsibility and received extra pay from his employer specifically for that purpose. Oddly enough, even though President Obama publicly said that Geithner’s accountant was responsible, Geithner blamed it on a Turbo Tax software glitch. No such “glitch” was ever discovered.

The choice is between which mistake is easier to correct: underdoing it or overdoing it.— Tim Geithner May 30, 2008

I guess when it came to HIS taxes, underdoing it was his choice. Too bad we don’t get the same option.

TurboTax or H&R Block – which one is better? Find out which one worked better for me.

Al Capone

al_caponeAlphonse Gabriel Capone is probably one of the most well known US tax evaders. After reigning terror on the streets of Chicago through racketeering, prostitution, murder, and the illegal production, transportation and sale of alcohol, Capone’s mob empire was brought to its knees in 1931 because of income tax evasion. You can thank Eliot Ness and Frank J. Wilson for pouring over multiple records and bank accounts in order to uncover the mass of taxes Mr. Capone evaded. Capone spent most of his sentence in Alcatraz, after attempting to bribe and intimidate the jurors in his case. Those jurors were replaced and Al was sent up the river. Though paroled early (what were they thinking?) in 1939, he never was able to revive his influence and died in Florida from complications associated with a stroke.

They can’t collect legal taxes from illegal money. –Al Capone

The IRS made sure Capone ate those words.

Pete Rose

pete_roseCharged in 1990 for filing false income-tax returns, baseball’s all time hit leader conveniently failed to report income from autographs, selling memorabilia, and horse-racing winnings and as a result, Peter Edward Rose spent five months in prison and paid a $50,000 fine. Eventually “Charlie Hustle” managed to hustle up enough cash to pay back over $366,000 in debts, and performed 1,000 hours of community service. Apparently he couldn’t switch hit between playing baseball and doing his taxes. Now banned from the Baseball Hall of Fame for gambling on baseball, Pete Rose is still a major record holder for many of Major League Baseballs highest achievements.

With the money I’m making, I should be playing two positions. – Pete Rose

Well obviously one of them wasn’t tax accountant.

Redd Foxx

redd_foxxRedd Foxx (aka John Elroy Sanford) was best known for his portrayal of Fred G. Sanford on the 1970s hit sitcom “Sanford and Son.” Known for his faux heart attack antics on-screen, Redd Foxx was also a stand up comedian, though not one that you’d take your children to hear. Later in his life, he fought with the IRS (guess who won) and lost his home in Las Vegas, his furniture, and his household belongings as Treasury agents seized and later sold everything to pay his back taxes. He died in 1991 while working on a new sitcom, still owing over $750,000.

Certain things should be yours to have when you work your way to the top. – Redd Foxx

Yeah, but despite that, agents with badges and guns will always be able to take those things away from you.

This year use Turbo Tax – the #1, best selling tax software!

Leona Helmsley

leona_helmsley

Convicted of income tax evasion in 1989, Leona Helmsley,  nicknamed the “Queen of Mean,” reportedly was a tyrant to work for. The investigation into her finances began after she allegedly refused to pay some building contractors for work performed on one of her high rise hotels. Those contractors reported that most of their expenses were being billed to other hotels in an attempt to evade paying taxes. Her housekeeper testified against her and gave the press the quote of the year (see below) and that quote followed Helmsley for the rest of her life. Helmsley served only 19 months of her 16 year sentence in prison and two months under house arrest. She died in 2007 leaving a $2.5 billion fortune, $12 million of which went to her dog, Trouble. The dog’s CPA is making sure Trouble’s taxes are paid however. There’s no sense in carrying on a family heritage of income tax evasion.

We don’t pay taxes. Only the little people pay taxes. – Leona Helmsley

Little people like YOU, Mrs. Helmsley! (love those eyebrows)

OJ Simpson

oj_simpsonIn 2007 the state of California claimed Orenthal James Simpson owed $1.44 million in back taxes. Known for football, Hertz rental car commercials and running through airports, and … that little incident where his wife was mysteriously murdered, OJ spent copious amounts of time searching for the “real killer or killers” on golf courses around the nation until he was jailed after being convoked of armed robbery and kidnapping. Since he’s currently in a Nevada prison serving a 33 year sentence because he was angry that a memorabilia collector had some of “his stuff”, good luck with that collection process. It would appear that, as far as the Internal Revenue Service is concerned, those gloves DO fit.

Money takes wings. The only thing that endures is character. – OJ Simpson

Ironic, don’t you think?

Abbott and Costello

abbott_and_costelloBud Abbott and Lou Costello were on top  of the world during the 1940s and ‘50s, but in 1956 the two were charged for back taxes and were forced to sell most of their possessions, including their film rights. The Internal Revenue Service may have been partly responsible for their breakup since the “Who’s on First?” creators dissolved their partnership just one year after their tax troubles surfaced. Financial stress can be ruinous to marriages and business partnerships as well. Maybe their new gig should have been called “Who’s Coughing It Up?”

That’s why so many stars are making pictures in Europe today. The tax guys are making thieves out of everybody. – Bud Abbott

You can’t hide in Europe either, Mr. Abbott!

Nicolas Cage

nicolas_cageFinding the National Treasure apparently wasn’t enough for Nicolas Cage (born Nicolas Kim Coppola). What got him in so much trouble was his attraction to strange real estate, castles in particular, as well as his insistence on living an extremely lavish lifestyle. Though he reportedly was paid very handsomely ($40 million in 2009), he outspent his income on everything from land to houses to cars to jewelry to yachts to private jets. Honestly, very few people have that kind of money and those that do, rarely flaunt it like Cage did.

Charged in 2009 with owing $6.2 million in back taxes, this movie star obviously couldn’t come up with it in 60 seconds!

To be a good actor you have to be something like a criminal, to be willing to break the rules to strive for something new. – Nicolas Cage

Yeah, I’m thinking that was a big tipoff for the IRS there Nick.

Richard Hatch

richard_hatchFor crying out loud, if you win big money on national television like Richard Hatch did on the first season of Survivor, you better pay your taxes. Hatch decided to use what the IRS calls a “frivolous tax argument” saying that no one from the agency had actually sent him an official assessment on his winnings. Seriously? I mean, c’mon … you think they really hadn’t heard that one before? And don’t you think that if that argument actually worked, we would ALL be using it?

Hatch was sentenced to 51 months in prison and then three years of supervised release as a result. I wonder if he celebrated his four birthdays in prison the same way he did on the show.

I’ve to this day never had an assessment. – Richard Hatch

Hey Rich, you got a million bucks. THAT’S your assessment.

Have you completed YOUR taxes? Get started for FREE with TurboTax and pay only when you file!

Wesley Snipes

wesley_snipesThe IRS filed a claim against Wesley Trent Snipes after he failed to file taxes from 1999 through 2004. His reasoning? He claimed to be a “non-resident alien” of the United States. Wow. Hard to believe that a kid born in Orlando and raised in New York is an alien. I would believe him if he showed up in a flying saucer, however.

While he was appealing his conviction, Snipes was able to continue working as an actor and even travelled internationally.

Snipes reported for prison on December 9, 2010 and is scheduled to be released July 19, 2013 — sounds like two and a half years to me. Apparently the Bureau of Prisons doesn’t have the top notch accountants that the IRS has.

I have a whole other side that has yet to be seen on screen. – Wesley Snipes

Would that other side involve tax law?

Sophia Loren

sophia_lorenThe USA isn’t the only country that has tax evaders. Sofia Villani Scicolone (aka Sophia Loren) served 17 days of a 30 day sentence in a Naples prison in 1982 for tax evasion. Those charges were related to allegations that her husband, Carlo Ponti, underpaid his taxes in previous decades. Unfortunately for Sophia, unlike here in the USA, Italy apparently had no Innocent Spouse provision, but her popularity never waned despite her conviction.

Getting ahead in a difficult profession requires avid faith in yourself. That is why some people with mediocre talent, but with great inner drive, go so much further than people with vastly superior talent. – Sophia Loren

Great quote. Use your talent to find either an average accountant or a great tax lawyer (the accountant is cheaper).

Sinbad

sinbadFamous funny man, Sinbad (aka David Adkins) was hit up in 2009 with a $2.5 million tax bill going back to returns he filed since 1999. Not only that, but he was listed in the top 10 of California’s worst tax offenders. The tax man always gets the last laugh – reportedly, Sinbad’s home is up for sale in order to pay his tax bill and he declared Chapter 7 bankruptcy in 2009.

If you`re not happy before you`re successful, you`re going to be miserable when you do become successful because all your problems just get magnified. – Sinbad

I agree – especially when it comes to your TAX problems!

Paying your taxes is serious. Don’t even think about cheating. It just isn’t worth it.

Photo Credits

  • Pete Rose photo by Kjunstorm
  • Sanford and Son Photo by Blog Talk Radio
  • All other photos were so prolific that it was difficult to know who to give credit to. If one of these is yours, use my contact form to let me know and I’ll certainly give you the credit and the link!

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.



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