IRS, Celebrities and Taxes

Celebrities though famous (and adulated by fans) like the rest of the US taxpayers must pay their taxes timely or have IRS tax problems. Whether due to an adverse audit result or failures to pay taxes due, American legends like Willie Nelson once had his entire estate seized by the IRS for his advisor’s failure to timely pay his payroll taxes due.

Current litigation between Johnny Depp and his business managers revealed the star actor has paid millions of dollars to the IRS in penalties and interest for not timely paying his income taxes.

How do the rich and famous celebrities become targets for IRS tax collection? Their high public profile makes them targets for publicity. So if they live the “high life” (i.e. expensive mansions, autos, jewelry aka the “Bling Life”) they fly right into the IRS radar. When they don’t pay their taxes due, the IRS swoops in and seizes their assets, liquidates them at reduced value and then pays off their taxes, penalties and interest due often destroying their entire estate (as happened to Willie Nelson).

For those unaware of the power of the IRS consider their annual budget (over $10B), their personnel (nearly 100,000) and their power (they collect over 3 trillion dollars in taxes yearly). When the US government could not incarcerate Al Capone, the IRS audited him and held him liable for unreported income (which is criminal tax evasion) and put him in jail for 10 years (and did the same to LA based mobster, Mickey Cohen).

In 2017, stories abound of celebrities in the film and music business with massive tax problems:

1) Legendary Singer Dionne Warwick owes the IRS over $10m

2) Comedian Chris Tucker owes the IRS over $12m

3) Musician R. Kelly owes the IRS over $6m

4) Singer Mary J. Blige owes the IRS over $3.4m

5) Singer Lionel Richie owes the IRS over $1m.

So despite fame, fortune and magnificent success these examples of celebrities with tax problems make it crystal clear when dealing with the IRS, you may run but you cannot hide.

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