Carnival of Personal Finance #252: Famous People With Tax Troubles Edition

 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 is this week, I thought I’d highlight some high profile people with tax problems in the past with one of their more memorable quotes. Enjoy the carnival!

Editor’s Picks

Parents Should Teach Kids Finances, Not Just Schools from Frugal Dad. We tend to abdicate that responsibility to teachers and schools, but the best place for kids to learn about personal finance is from their parents. Schools can give them some “book learning” (as we say in the South), but kids need much more. They need parents who will set examples and can help their children learn that finance and economics is all about making wise choices with scarce resources.

Squawkfox presents How to Set Financial Goals – 3 Financial Goals Worksheets. You can always count on Kerry to create a worksheet to help you get better organized. Despite how much I love using YNAB and other financial software, sometimes a good old pencil and paper can help me sort things out much better.

Josh from Rocket Finance presents Top 10 Smarmy Financial Products on TV. How many of these have you seen? When’s the last time you used the word “smarmy?” After reading Josh’s list, I keep seeing all these smarmy things on TV! LOL!

Jeff Rose from Good Financial Cents presents How To Select a Guardian for Your Children. Some of the most important decisions we can make as parents are those that are difficult to imagine. Jeff outlines the process of selecting a guardian for your kids in case the unimaginable happens. It would be much better for your kids if you go ahead and make those choices now.

Mike from Personal Finance Ninja presents Why You Don’t Need to Rush Out and Take Advantage of the Expiring Housing Credit. Mike is also an Economist Ninja! With a series of great drawings and graphs, he shows why that tax credit may not be all it’s cracked up to be.

Ryan from Cash Money Life presents FTC Changes Free Credit Report Advertising Rules. I’m going to miss those funny free credit report commercials but the same company that was targeted by the FTC is now offering a “free” credit score. Make sure you follow Ryan’s recommendation and cancel during the “free” trial.

J. Money from Budgets Are Sexy presents Get Your Cash Flow Up, Baby! Funny how we all think WE’RE the exception to the rule and that we’re completely in control of our money. J. Money challenges that assumption in this great article.

Money Management

tim_geithner

At the top of the list only because he is responsible for the IRS and by default, for making sure everyone else pays their taxes, Treasury Secretary Tim Geithner was exposed during his Senate confirmation hearings for failing to pay $35,000 in self employment taxes (I just paid mine!). 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.

Finance

al_capone

Al Capone is probably one of the most well known US tax evaders. Capone’s mob empire was brought to its knees in 1931 because of income tax evasion, not racketeering. 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.

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

The IRS made sure Capone ate those words.

  • Evan from My Journey to Millions says that Comparatively Speaking A Million Dollars is Still a lot of Freaking Money. Just ask anyone who doesn’t have a million in the bank!
  • Mr. Cheap from Four Pillars advises us on The Total Cost of Ownership. There is more to buying just about anything than the price tag.
  • Mrs. Not Made of Money from Not Made of Money presents How to Recover from a Financial Setback. It isn’t that you got knocked down, it’s the fact that you got back up.
  • Kimberly Palmer from Alpha Consumer wants to Test Your Insurance IQ. How do you score?
  • James from DINKs Finance presents You Are What You Read. In that case, I’m one big finance book!
  • Keith Morris from LifeTuner Blog asks if Overdraft Protection a Thing of the Past? Interesting concept. The US government has been abusing overdraft protection for decades.
  • Helen from Science And Money presents New Law on Student Loans. The government takes over another industry.

    Investing

    pete_rose

Charged 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. Rose spent five months in prison, paid 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.

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

Well obviously one of them wasn’t tax accountant.

Budgeting

redd_foxx

Redd Foxx (aka John Elroy Sanford) was best known for his portrayal of Fred G. Sanford on the 1970s hit sitcom “Sanford and Son.” 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, and certain things you worked for actually belong to someone else.

Saving

leona_helmsley

Convicted of income tax evasion in 1989, Leona Helmsley,  nicknamed the “Queen of Mean,” reportedly was a tyrant to work for. Helmsley served only 18 months of her 16 year sentence. 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.

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

Ha ha! Little people like YOU, Mrs. Helmsley!

Frugality

oj_simpson

In 2007 the state of California claimed OJ Simpson owed $1.44 million in back taxes. Since he’s currently in a Nevada prison serving a 33 year sentence for armed robbery and kidnapping, good luck with that collection process.

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

Ironic, don’t you think?

Debt

abbott_and_costello

Bud 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 IRS may have been responsible for their breakup — the “Who’s on First?” creators dissolved their partnership just one year later. Maybe their new gig should have been called “Who’s Busted 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!

Credit

nicolas_cage

Finding the National Treasure apparently wasn’t enough for Nicolas Cage. Charged in 2009 with owing $6.2 million in back taxes, this movie star probably can’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.

Reviews

richard_hatch

For 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 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.

Real Estate

wesley_snipes

The IRS filed a claim against Wesley 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.

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

Would that other side involve tax law?

Taxes

marc_anthony

Even though he made $15.5 million between 2000 and 2004, Marc Anthony (aka Jenifer Lopez’s husband) failed to file taxes and as a result, was hit with an order to pay $2.5 million in back taxes. That’s only a 16 percent tax rate. How do I get in on that deal?

Fame is addictive. Money is addictive. Attention is addictive. But golf is second to none. – Marc Anthony

I understand that staying out of prison for failing to pay your taxes is pretty addictive as well.

Career

sophia_loren

The USA isn’t the only country that has tax evaders. 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 the USA, Italy apparently had no Innocent Spouse provision.

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).

  • Ryan from Military Finance Network presents Military Members Have it Too Good and Whine Too Much. Ryan is a veteran and knows his stuff. This post is a response to a comment on his blog and is worth the read.
  • Pop from Pop Economics presents Why do we work so much?. In the 1950s, economists predicted that by now, we’d only be working a few hours a day or a few days a week. That didn’t happen. Pop explores why and what options we have to grab a little bit of our time back from our employers.
  • WellHeeled from Well Heeled Blog presents Graduate School: (When) Should I Go?. Graduate school requires a big financial and time commitment. Here I detail 3 questions to ask to make sure you’re making an informed decision.

Economy

sinbad

Famous 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.

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!

Other

buster_keaton

Legendary silent film star, Buster Keaton owed the IRS $28,000 in 1933 (that converts to almost $500,000 today). Fame apparently had a devastating effect on his finances and he tried to drown his troubles in alcohol. After he was admitted to a mental hospital, he DID pull his life together, escaped from a strait jacket and married his nurse (wow, what a story!). He returned to film though he never fully rebounded to his former success.

Life is too serious to do farce comedy. – Buster Keaton

Paying your taxes is serious, though.

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!

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